area handbook series 



Estonia, Latvia, 
and Lithuania 

country studies 



Estonia, Latvia, 
and Lithuania 

country studies 



Federal Research Division 
Library of Congress 
Edited by 
Walter R. Iwaskiw 
Research Completed 
January 1995 




On the cover: Toompea Castle, Tallinn (upper left); 
tower of the Dome Cathedral, Riga (right); and way- 
side wooden sculpture near Druskininkai, Lithuania 



First Edition, First Printing, 1996. 

Library of Congress Cataloging-in-Publication Data 

Estonia, Latvia, and Lithuania : country studies / Federal 
Research Division, Library of Congress ; edited by Walter 
R. Iwaskiw — 1st ed. 

p. cm. — (Area handbook series, ISSN 1057-5294) 
(DA pam; 550-113) 

"Research completed January 1995." 
Includes bibliographical references (pp. 267-279) and 
index. 

ISBN 0-8444-0851-4 (hard cover : alk. paper) 

Copy 3 Z663.275 .E86 1996 

1. Baltic States. I. Iwaskiw, Walter R., 1958- . II. 
Library of Congress. Federal Research Division. III. 
Series. IV. Series: DA pam ; 550-113. 
DK502.35.E86 1996 96-4057 
947'.4— dc20 CIP 



Headquarters, Department of the Army 
DA Pam 550-113 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, D.C. 20402 



Foreword 



This volume is one in a continuing series of books prepared 
by the Federal Research Division of the Library of Congress 
under the Country Studies/Area Handbook Program spon- 
sored by the Department of the Army. The last two pages of this 
book list the other published studies. 

Most books in the series deal with a particular foreign coun- 
try, describing and analyzing its political, economic, social, and 
national security systems and institutions, and examining the 
interrelationships of those systems and the ways they are 
shaped by historical and cultural factors. Each study is written 
by a multidisciplinary team of social scientists. The authors 
seek to provide a basic understanding of the observed society, 
striving for a dynamic rather than a static portrayal. Particular 
attention is devoted to the people who make up the society, 
their origins, dominant beliefs and values, their common inter- 
ests and the issues on which they are divided, the nature and 
extent of their involvement with national institutions, and their 
attitudes toward each other and toward their social system and 
political order. 

The books represent the analysis of the authors and should 
not be construed as an expression of an official United States 
government position, policy, or decision. The authors have 
sought to adhere to accepted standards of scholarly objectivity. 
Corrections, additions, and suggestions for changes from read- 
ers will be welcomed for use in future editions. 

Louis R. Mortimer 
Chief 

Federal Research Division 
Library of Congress 
Washington, DC 20540-4840 



in 



Acknowledgments 



The authors are indebted to the numerous individuals and 
organizations who contributed to the preparation of this vol- 
ume. Valuable advice was provided by Stephen R. Burant and 
Jonathan Bemis of the Department of State. The collection of 
data was assisted by the contributions of the embassies of Esto- 
nia, Latvia, and Lithuania. Sincere thanks go to all individuals 
who so graciously allowed their photographs to be used in this 
study, particularly to Priit Vesilind, from whose vast collection 
many photographs were selected. 

The authors gratefully acknowledge Ralph K. Benesch, who 
oversees the Country Studies/Area Handbook Program for the 
Department of the Army, and Sandra W. Meditz, the Federal 
Research Division's coordinator of the handbook series, for her 
guidance and suggestions. Special thanks also go to Marilyn L. 
Majeska, who supervised editing; Andrea T. Merrill, who man- 
aged production; David P. Cabitto, who provided graphics sup- 
port and, together with the firm of Maryland Mapping and 
Graphics, prepared the maps; Thomas D. Hall, who assembled 
the materials for the maps; Wayne Home, who prepared the 
illustrations on the title page of each chapter and on the book 
cover; Pirkko M. Johnes, who researched and drafted the coun- 
try profiles; and Helen Fedor, who coordinated the acquisition 
of photographs. The following individuals are gratefully 
acknowledged as well: Vincent Ercolano and Janet Willen, who 
edited the text; Beverly Wolpert, who performed the final pre- 
publication editorial review; Barbara Edgerton and Izella Wat- 
son, who did the word processing; Victoria Agee, who compiled 
the index; and David P. Cabitto, Stephen C. Cranton, Janie L. 
Gilchrist, and Izella Watson, who prepared the camera-ready 
copy. 



v 



Contents 



Page 

Foreword iii 

Acknowledgments v 

Preface xi 

Table A. Chronology of Important Events xiii 

Introduction xix 

Chapter 1. Estonia 1 

Velio A. Pettai 

COUNTRY PROFILE 3 

HISTORICAL SETTING 12 

Early History 12 

Interwar Independence, 1918-40 16 

The Soviet Era, 1940-85 18 

The Pursuit of Independence, 1985-91 20 

Independence Reclaimed, August 1991-October 

1992 24 

PHYSICAL ENVIRONMENT 28 

Geographic Features 28 

Environmental Issues 29 

SOCIETY 30 

Population 30 

Health 31 

Welfare 33 

Education System 33 

Religion 34 

Language and Culture 36 

ECONOMY 39 

Economic Reform History 39 

Recent Economic Developments 42 

Economic Sectors 56 

GOVERNMENT AND POLITICS 65 

Current Politics 65 



vii 



Constitutional Foundations 68 

Mass Media 70 

FOREIGN RELATIONS 72 

Relations with the West 72 

Relations with Russia 74 

NATIONAL SECURITY 75 

Armed Forces 76 

Crime and Law Enforcement 78 

OUTLOOK 78 

Chapter 2. Latvia 83 

Juris Dreifelds 

COUNTRY PROFILE 85 

HISTORICAL SETTING 93 

Early History 93 

Independence, 1918-40 96 

The Soviet Period 98 

The Pursuit of Independence, 1987-91 102 

PHYSICAL ENVIRONMENT 1 04 

Geographic Features 104 

Climate 107 

Natural Resources 110 

SOCIETY 110 

Population 110 

Population Changes since Independence 112 

Marriage and Divorce 114 

Urbanization, Employment, and Education 115 

Health and Welfare 118 

Religion 121 

Language and Culture 129 

ECONOMY 130 

Historical Legacy 130 

The Soviet Period 131 

Economic Sectors 133 

Postindependence Economic Difficulties 139 

GOVERNMENT AND POLITICS 1 48 

Transition to Independence 148 

Political System 150 

Current Politics 151 

Mass Media 153 

FOREIGN RELATIONS 153 

viii 



Establishing Foreign Relations 153 

Foreign Policy Directions 156 

NATIONAL SECURITY. 159 

Defense 159 

Crime and Law Enforcement 162 

OUTLOOK 164 

Chapter 3. Lithuania 167 

V. Stanley Vardys and William A. Sloven 

COUNTRY PROFILE 1 69 

HISTORICAL SETTING 177 

Early History 177 

Independence, 1918-40 179 

The Soviet Republic 180 

The Move Toward Independence, 1987-91 184 

PHYSICAL ENVIRONMENT 186 

Topography, Drainage, and Climate 186 

The Environment 187 

Natural Resources 188 

SOCIETY 189 

Population 189 

Health and Welfare 194 

Religion 197 

Language and Culture 202 

Education 205 

ECONOMY 206 

Economic Reforms 207 

Structure of the Economy 212 

Labor Force 216 

Transportation and Telecommunications 217 

Foreign Economic Relations 219 

Reform Yields Results 223 

GOVERNMENT AND POLITICS 223 

The Constitutional System 224 

Politics 227 

Mass Media 232 

FOREIGN RELATIONS 233 

NATIONAL SECURITY. 236 

Armed Forces 238 

Crime and Law Enforcement 239 

Penal Code and Prisons 240 

ix 



OUTLOOK 241 

Appendix. Tables 243 

Bibliography 267 

Glossary 281 

Index 287 

Contributors 301 

List of Figures 

1 Estonia, Latvia, and Lithuania: Geographic Setting, 

1995 xviii 

2 Estonia, Latvia, and Lithuania, 1938 xxvi 

3 Estonia, 1995 10 

4 Population of Estonia by Age and Gender, 1991 ... . 32 

5 Economic Activity in Estonia, 1995 62 

6 Transportation System of Estonia, 1995 64 

7 Latvia, 1995 92 

8 Population of Latvia by Age and Gender, 1993 114 

9 Economic Activity in Latvia, 1995 134 

10 Transportation System of Latvia, 1995 136 

11 Lithuania, 1995 176 

12 Population of Lithuania by Age and Gender, 

1994 190 

13 Economic Activity in Lithuania, 1995 214 

14 Transportation System of Lithuania, 1995 218 



x 



Preface 



Estonia, Latvia, and Lithuania: Country Studies is the latest in a 
new subseries examining the fifteen newly independent states 
that emerged from the disintegration of the Soviet Union at 
the end of 1991. Hitherto, aside from their coverage in the 
1991 Soviet Union: A Country Study, none had received individ- 
ual treatment in the Country Studies/Area Handbook series. 
This volume aims to provide an overview of the history, Soviet 
legacy, and post-Soviet development of the Baltic states, whose 
first modern period of independence (1918-40) was a casualty 
of the 1939 Nazi-Soviet Nonaggression Pact. The authors 
describe the quest of Estonia, Latvia, and Lithuania for self- 
determination, their struggle to reestablish independent state- 
hood, and their attempts to cope with the political, economic, 
and social problems confronting them in the 1990s. 

Transliteration of all Slavic names generally follows the sys- 
tem developed by the United States Board on Geographic 
Names (BGN). Conventional English-language variants, such 
as Moscow and Yeltsin (rather than Moskva and Yel'tsin), are 
used when appropriate. Estonian, Latvian, and Lithuanian 
names appearing in the text of this volume regrettably are miss- 
ing some diacritics because the typesetting software being used 
cannot produce all the necessary diacritics (although they do 
appear on the maps). Measurements are given in the metric 
system; a conversion table is provided in the Appendix. 

The body of the text reflects information available as of Jan- 
uary 1995. Certain other portions of the text, however, have 
been updated. The Introduction discusses significant events 
and changes that have occurred since the completion of 
research; the Chronology, Country Profiles, and Glossary 
include updated information as available; and the Bibliography 
lists recently published sources thought to be particularly help- 
ful to the reader. 



xi 



Table A. Chronology of Important Events 



Period 



Description 



CA. 2500-1500 B.C. 

FIRST CENTURY-nSIXTH 
CENTURY A. D. 



EIGHTH CENTURY-TWELFTH 
CENTURY 

THIRTEENTH CENTURY 
1253 

FOURTEENTH CENTURY 

1343-45 

SIXTEENTH CENTURY 
1558^83 

1569 

1584 

SEVENTEENTH CENTURY 
1629 

1632 

EIGHTEENTH CENTURY 
1710 

1795 

NINETEENTH CENTURY 

1816-19 
TWENTIETH CENTURY 

1905 

1917 



1918 



February 



Finno-Ugric and proto-Baltic tribes settle on Baltic shores. 

Early Baltic peoples experience rapid cultural progress 
and expansion of trade with Roman Empire and Ger- 
manic tribes. 

Scandinavian Vikings and, subsequently, Slavic tribes 
engage in trade and war with Baltic peoples. 

Northern Estonia conquered by Danes and rest of Estonia 
and Latvia by Germans. 

Mindaugas crowned king of Lithuania. 

Grand Duke Gediminas and his descendants expand 
Lithuania's territories southward to Black Sea. 

Estonian peasant uprising prompts Danes to relinquish 
control of northern Estonia to Germans. 



Army of Russian tsar Ivan IV (the Terrible) invades Livo- 
nia; Sweden and Poland help repel invasion. 

Lithuania unites with Poland, forming Polish-Lithuanian 
Commonwealth. 

Northern Estonia incorporated into Sweden's Duchy of 
Estland. 



Swedish-Polish struggle for control of Livonia ends with 
Poland's being forced to cede entire territory, except 
southeastern province of Latgale, to Sweden. 

Tartu University founded by Swedes. 



Russian tsar Peter I (the Great) succeeds in wresting con- 
trol of Estland and Livland (southern Estonia and 
northern Latvia) from Sweden. 

Poland partitioned; Lithuania annexed by Russian 
Empire. 



Serfdom formally abolished in Estland and Livland. 



Tsarist Russian authorities respond with violence and 
repression to Baltic demands for radical political 
change during Revolution of 1905. 

Tsar Nicholas II abdicates Russian throne; tsarist regime 
collapses. Russian provisional government allows Esto- 
nia's territorial unification as one province. Bolsheviks 
take power in Russia and make significant political 
inroads in Baltic region. 

Estonia and Lithuania proclaim independence. 



Table A. Chronology of Important Events 



Period 



Description 



November 

1918-20 

1920 

1920-22 

1921 

1923 
1924 
1926-29 

1934 

1939 August 
October 

1940 



1941 June 



1941-45 



Latvia proclaims independence. 

Baltic states engage in war to defend independence; Bol- 
shevik, White Russian, German, Polish, and other forces 
struggle for control of territories. Lithuania fails to 
regain Polish-occupied Vilnius region. 

Baltic states sign peace treaties with Soviet Russia; Moscow 
recognizes their independence and renounces all 
claims to their territories. 

Land reform carried out in Baltic states. Democratic con- 
stitutions introduced. 

Estonia, Latvia, and Lithuania admitted to League of 
Nations. 

Lithuania annexes Klaipeda region. 

Soviet-backed communist coup attempt in Estonia fails. 

Military coup in Lithuania; authoritarian regime gradually 
introduced. 

State of emergency declared in Estonia and Latvia amidst 
growing political instability; parliaments suspended and 
authoritarian regimes introduced. 

Nazi-Soviet Nonaggression Pact signed; Estonia, Latvia, 
and, soon, Lithuania assigned to Soviet sphere of influ- 
ence. 

Baltic states pressured into signing treaties allowing Mos- 
cow to station troops on their soil; Vilnius given back to 
Lithuania. 

Red Army occupies Estonia, Latvia, and Lithuania; pro- 
Soviet governments "elected," and Baltic states annexed 
to Soviet Union. 

Soviet authorities arrest and deport tens of thousands of 
Estonians, Latvians, and Lithuanians to Siberia; depor- 
tations interrupted by Nazi Germany's invasion of 
Soviet Union; Lithuanian resistance movement 
launches revolt against Soviet rule. 

Baltic states under German occupation; Nazi regime insti- 
tutes compulsory draft of Baits into labor or military 
service; Jews and Gypsies subjected to mass annihila- 
tion; nationalist and communist resistance movements 



1944-45 



1945-52 



1947-51 

1949 March 



Soviet forces reoccupy Estonia, Latvia, and Lithuania; 
hundreds of thousands of refugees flee to West. 

Anti-Soviet guerrilla war in Baltic republics claims tens of 
thousands of casualties on both sides. 

Agriculture collectivized in Baltic republics. 

Soviet authorities resume campaign of terror in Estonia, 
Latvia, and Lithuania; more than 100,000 people from 
Baltic republics deported to Siberia. 



Table A. Chronology of Important Events 



Period 



Description 



1953 
1959 

1968 

1970^82 

1972 

1973 

1985 

1987-88 



April 
June 

October 



November 

1989 March 
May 

July 
August 

December 

1990 February 
March 



April 
May 



Repression eases after death of Joseph V. Stalin. 

Nikita S. Khrushchev purges Eduards Berklavs and other 
national communists in Latvia. 

Repression increases after Soviet invasion of Czechoslova- 
kia; dissident movement grows, particularly in Lithua- 
nia. 

Period of stagnation under Leonid I. Brezhnev; living 
standards decline; Russification intensifies. 

Lithuanian student Romas Kalanta immolates himself in 
protest against Soviet rule. 

Publication of The Chronicle of the Catholic Church in Lithua- 
nia begins. 

Mikhail S. Gorbachev introduces policies of glasnost and 
perestroiha. 

Baltic dissidents hold public demonstrations in Tallinn, 
Riga, and Vilnius. 

Estonian Popular Front founded. 

Estonian communist leader Karl Vaino removed. Sajudis 
founded in Lithuania. 

Popular Front of Latvia holds first congress. Sajudis con- 
gress in Lithuania elects Vytautas Landsbergis chair- 
man. Algirdas Brazauskas becomes Lithuanian 
communist leader. 

Estonian Supreme Soviet adopts declaration of sover- 
eignty. 

Soviet loyalist Intermovement founded in Estonia. 

Lithuanian Supreme Soviet proclaims Lithuania's sover- 
eignty. 

Latvian Supreme Soviet adopts declaration of sovereignty. 

Human chain forms from Tallinn to Vilnius as a protest 
on fiftieth anniversary of Nazi-Soviet Nonaggression 
Pact. Intermovement stages strikes in Estonia. 

Communist Party of Lithuania splits from Communist 
Party of the Soviet Union. 

Elections held for Congress of Estonia, rival parliament to 
Estonian Supreme Soviet. 

Lithuanian Supreme Soviet elects Vytautas Landsbergis 
chairman of presidium; votes for declaration of inde- 
pendence. Estonian Supreme Soviet votes for transition 
to independence. 

Moscow imposes economic blockade on Lithuania. Baltic 
Agreement on Economic Cooperation signed by Esto- 
nia, Latvia, and Lithuania. 

Latvian Supreme Council votes for transition to indepen- 
dence. Baltic countries renew 1934 Baltic Treaty on 
Unity and Cooperation. 



XV 



Table A . Chronology of Important Events 



Period 



Description 



June 
1991 January 



February-March 
August 

September 

November 

1992 January 

June 

July 

September 
October 

October-November 
December 

1993 February 
March 

June 



July 



August 



Lithuanian Supreme Council agrees to six-month morato- 
rium on independence declaration; Moscow lifts eco- 
nomic blockade. 

Lithuanian prime minister Kazimiera Prunskiene resigns 
after dispute with Vytautas Landsbergis. Soviet military 
intervention in Vilnius and Riga results in massacre of 
civilians. 

Referenda in Estonia, Latvia, and Lithuania show over- 
whelming support for independence. 

Estonian Supreme Council and Latvian Supreme Council 
vote for full independence following coup in Moscow; 
coup collapses; Baltic states restore diplomatic relations 
with many countries. 

Soviet Union recognizes independence of Baltic states. 
Estonia, Latvia, and Lithuania admitted to United 
Nations. 

Estonian Supreme Council decides to require naturaliza- 
tion of Soviet-era immigrants. 

Estonian prime minister Edgar Savisaar resigns; Tiit Vahi 
forms new government. Latvian Supreme Council reaf- 
firms validity of Latvia's pre-Soviet borders. 

New Estonian constitution adopted by referendum. 

Lithuanian prime minister Gediminas Vagnorius resigns 
after vote of no confidence; replaced by Aleksandras 
Abisala. 

Election of new parliament, Riigikogu, in Estonia yields 
center-right coalition government led by Fatherland 
Party (Isamaa). 

Lithuanian Democratic Labor Party wins absolute majority 
of seats in Seimas; Algirdas Brazauskas elected chair- 
man; Sajudis fares poorly. Lennart Meri elected presi- 
dent of Estonia; Mart Laar becomes prime minister. 

Lithuania's new constitution approved by referendum and 
adopted by Seimas. 

Seimas chairman Brazauskas appoints Bronislovas Lubys 
prime minister of Lithuania. 

Algirdas Brazauskas elected president of Lithuania. 

Lithuanian prime minister Bronislovas Lubys resigns; 
replaced byAdolfas Slezevicius. 

Political crisis in Estonia follows passage of Law on Aliens; 
measure amended after presidential veto. Latvia's Way 
finishes first in first post-Soviet national elections to Sae- 
ima. 

Saeima restores 1922 constitution and elects Guntis Ulma- 
nis president of Latvia; Valdis Birkavs becomes prime 
minister. 

Russian military forces withdrawn from Lithuania. 



XVI 



Table A. Chronology of Important Events 



Period 



Description 



October 
1994 May 

July 

August 
September 



1995 



February 



March 



April 
May 

July 

September-October 
October 



Isamaa fares poorly in Estonia's first post-Soviet local elec- 
tions; Tiit Vahi's Coalition Party finishes first. 

Latvian National Independence Movement finishes first in 
Latvia's first post-Soviet local elections; ex-communists 
fare worst. 

Ruling coalition in Latvia breaks up; Birkavs government 
resigns. 

Russian military forces withdrawn from Estonia and 
Latvia. Citizenship bill signed into law in Latvia; contro- 
versial restrictive quota on naturalization excluded. 

Estonian prime minister Mart Laar loses vote of no confi- 
dence; Andres Tarand confirmed as prime minister. 
Maris Gailis confirmed as prime minister of Latvia. 

Latvia admitted to Council of Europe, after abandoning 
restrictive quotas on naturalization. 

Coalition Party-Rural Union alliance finishes first in Esto- 
nian parliamentary elections; Russophone community 
gains representation. Lithuanian Democratic Labor 
Party fares poorly in local elections. 

Tiit Vihi confirmed as Estonia's prime minister. 

Latvia's Baltija Bank collapses. 

Lithuanian economics minister Aleksandras Vasiliauskas 
resigns after cabinet dispute over economic reform. 

Democratic Party Saimnieks finishes first in Latvian parlia- 
mentary elections; followed closely by far-right For 
Latvia. 

Estonian interior minister Edgar Savisaar implicated in 
scandal; Vahi government resigns. 



xvii 




Figure 1. Estonia, Latvia, and Lithuania: Geographic Setting, 1995 



xviii 



Introduction 



FORCIBLY ANNEXED TO THE SOVIET UNION fifty-one 
years earlier, the Baltic states — Estonia, Latvia, and Lithuania — 
regained independence in 1991 after an abortive coup in Mos- 
cow that accelerated the collapse of the Soviet regime. Having 
been, in the words of former British foreign secretary Douglas 
Hurd, "stolen or kidnapped from the European family," these 
nations embarked on a course of political and economic 
restructuring and reintegration with the West. Their experi- 
ence with independent statehood and, to a lesser extent, with 
democracy in the 1920s and 1930s (an advantage not enjoyed 
by the other former Soviet republics) , as well as their ability to 
maintain a strong sense of national identity under foreign 
hegemony, has helped them in their efforts to deal with the 
legacies of Soviet rule. The challenges, nonetheless, remain 
formidable. 

A major demographic shift occurred during the Soviet era in 
the Baltic region, particularly in Estonia and Latvia, where, 
according to the 1989 census, the titular nationalities 
accounted for only 61.5 and 52 percent, respectively, of each 
country's population. The Russians, by far the largest ethnic 
minority, made up 30.3 percent of Estonia's population and 34 
percent of Latvia's. There were high concentrations of Russians 
in Tallinn, Riga, and Vilnius — the capital cities of the Baltic 
republics. Encouraged by the Soviet authorities, a massive 
influx of immigrants reduced Latvians and Estonians to minor- 
ity status in a number of their largest cities. After indepen- 
dence, Estonia and Latvia faced the challenge of integrating 
into their political life these large, mostly insular Russophone 
communities, whose loyalty to the new states had yet to be dem- 
onstrated, without jeopardizing their hard-won independence. 
Unlike Lithuania, whose higher birth rate and larger indige- 
nous work force permitted the republic to maintain an approx- 
imately 80 percent share of ethnic Lithuanians, Latvia and 
Estonia refused to grant automatic citizenship to the Soviet-era 
settlers. Lithuania's relatively small ethnic minorities, of which 
the Russians and the Poles are the most significant, have been 
easier to accommodate. 

The issue of ethnic minority rights in Latvia and Estonia 
gained prominence primarily in the international arena, espe- 



xix 



daily in 1992 and 1993 when Moscow tried to link it to the 
departure of Russian (former Soviet) troops from the two 
countries. Under Western diplomatic pressure, Russian mili- 
tary forces finally were withdrawn in August 1994, yet Moscow 
continued to view the region as "the near abroad," an area con- 
tiguous to Russia and within its sphere of influence. To punish 
its former colonies — Latvia and Estonia, for allegedly mistreat- 
ing their Russian minorities, and Lithuania, for refusing to 
legitimate Russia's right of military transit to and from the 
exclave of Kaliningrad — Moscow resorted to economic mea- 
sures. The Russian government levied prohibitive tariffs on 
imports of Baltic goods and raised prices on Russian fuel and 
other essential commodities. These actions spurred on efforts 
by the three countries to mitigate their geopolitical and eco- 
nomic vulnerability through the development of stronger rela- 
tionships with the West. 

In 1994 Estonia, Latvia, and Lithuania signed and ratified 
free-trade agreements with the European Union (EU — see 
Glossary), and in 1995 each country signed an Association 
Agreement with the EU. Estonia and Lithuania became mem- 
bers of the Council of Europe (see Glossary) in 1993; Latvia 
was admitted in 1995, after its parliament backed down from a 
controversial quota system that would have restricted the natu- 
ralization of permanent residents. All have joined the North 
Atlantic Cooperation Council, the Organization for Security 
and Cooperation in Europe, and the Partnership for Peace 
program of the North Atlantic Treaty Organization (NATO), 
and all have participated in NATO exercises. They have reaf- 
firmed their desire to join NATO, in spite of Russia's hostile 
reaction. That reaction included a warning in September 1995 
from Russian deputy foreign minister Sergey Krylov that his 
country reserves the right to employ military, economic, and 
political measures to prevent the Baltic states from becoming 
members of the NATO alliance. Shortly afterward, the Moscow 
newspaper Komsomol' skaya pravda quoted high-level Russian 
military sources discussing a draft military doctrine that would 
authorize the invasion of Estonia, Latvia, and Lithuania if they 
were to join NATO. 

On the domestic front, although the political exclusion of 
many Soviet-era immigrants in Estonia and Latvia could 
impede the process of building stable democratic systems, 
there has been no political violence against the Russophone 
population and less ethnic tension than in many other newly 



xx 



independent states. In Latvia 62 percent of the Russian speak- 
ers interviewed in a public opinion survey in the fall of 1993 
described relations between their group and the ethnic Latvian 
population as good; only 22 percent said relations were not 
good. In Estonia 87 percent of the local Russians polled in late 
1994 indicated that they had experienced few or no problems 
with the indigenous population, and 92 percent wanted to stay 
in the country. According to Aleksandr Kinsburskiy, a Moscow 
sociologist who studies Russian minorities in the former Soviet 
republics, "The overwhelming majority of ethnic Russians in 
Estonia have accepted the Estonian government's tough policy 
toward them and decided to adapt to it." They do not wish to 
relocate to Russia, if for no other reason than that they enjoy a 
higher standard of living in Estonia. 

The Baltic countries generally have made greater progress in 
rebuilding their economies than Russia and the other former 
Soviet republics. Estonia, at the forefront of economic reform, 
was the first to introduce its own currency, which is fully con- 
vertible today. The country also has had considerable success 
in attracting foreign aid and investment and reorienting for- 
eign trade to the West. Like Latvia and Lithuania, it has experi- 
enced painful economic downturns since reestablishing 
independence but in the mid-1990s was showing signs of a sus- 
tained economic recovery. The Economist Intelligence Unit 
estimated that Estonia's gross domestic product (GDP — see 
Glossary) grew by 4.7 percent in 1994 and predicted a growth 
rate of 5 percent in 1995, citing a continuing fall in unemploy- 
ment and increases in capital equipment purchases, port and 
other transit volumes, and foreign trade. Detracting from an 
otherwise strong economic performance is a large trade defi- 
cit, which was estimated to be US$389 million in 1994 and was 
expected to reach US$600 million in 1995, although the gov- 
ernment is taking steps to assist Estonian exporters. 

More troublesome is the situation in neighboring Latvia fol- 
lowing the collapse in May 1995 of Baltija Bank, the country's 
largest commercial bank. Baltija's collapse exposed serious 
weaknesses in what had been considered to be a healthy bank- 
ing sector, shaking the confidence of foreign investors and 
dampening economic growth. Latvia's rate of GDP growth, 
which was earlier expected to increase from an estimated 2 per- 
cent in 1994 to 3 percent in 1995 and 4.5 percent in 1996, was 
scaled down to 1 percent in 1995 and 3 percent in 1996. Latvia 



xxi 



also has had to cope with a high unemployment rate (6.7 per- 
cent in June 1995) and a worsening budget deficit. 

Controlling unemployment and balancing the budget are 
concerns shared by Lithuania as well, although declining for- 
eign investment is a greater problem there. In part because, 
unlike Estonia and Latvia, it does not allow foreigners to own 
land and buildings, Lithuania has had greater difficulty in 
attracting foreign capital. Direct foreign investment in Lithua- 
nia totaled US$170 million at the end of 1994, compared with 
US$474 million in Estonia and US$327 million in Latvia. Rus- 
sian companies account for the largest number of joint ven- 
tures in Lithuania. Fluctuating industrial output and sales in 
1995 made it difficult to determine to what extent the coun- 
try's economy was recovering. Lithuania's GDP grew by an esti- 
mated 0.6 percent in 1994; a growth rate of 3 percent in 1995 
was predicted. 

Controversy in the Lithuanian Democratic Labor Party 
(LDLP) government over the pace of Lithuania's economic 
reform, which is the slowest overall in the Baltic region, 
resulted in the resignation of the economics minister, Aleksan- 
dras Vasiliauskas, in July 1995. Several other members of the 
cabinet disagreed with Prime Minister Adolfas Slezevicius, who 
advocated accelerating the pace of reform. Lithuania's banking 
sector, although more stable than that of Latvia, is arousing 
public concern and could divide the government further. In 
July some 1,000 people assembled for a rally in Vilnius to call 
for improved legislation to protect bank deposits and to 
demand the resignation of Prime Minister Slezevicius and Pres- 
ident Algirdas Brazauskas for their failure to remedy the weak- 
ness of the banking and financial system. Another call for the 
resignation of the government came in September from the 
Fatherland Union, the main opposition grouping and succes- 
sor to the Sajudis movement. The Fatherland Union accused 
the ruling LDLP, successor to the Communist Party of Lithua- 
nia, of condoning corruption, intentionally driving businesses 
to bankruptcy, and impoverishing the population. The opposi- 
tion has also accused the government of taking a weak negoti- 
ating stance toward Russia, particularly over the issue of 
Russian military transit through Lithuanian territory. 

Popular disenchantment with the ruling leftist government 
and with politics in general was evident in Lithuania's March 
1995 local elections, which generated a low voter turnout and 
gave right-of-center parties more than half the total number of 



xxii 



seats. In April, however, the LDLP succeeded in winning a par- 
liamentary by-election in the Kaisiadorys district. The March 
elections also showed an increase in political fragmentation: 
seventeen parties were registered in the elections; sixteen of 
the seventeen secured seats on local councils. 

Even greater was the degree of fragmentation on Latvia's 
political scene in early 1995: more than forty parties prepared 
to contest the general elections in the fall. Many of these par- 
ties merged subsequently in an attempt to pass the threshold 
for parliamentary representation. After its defeat by the right- 
wing Latvian National Independence Movement in local elec- 
tions one year earlier, the Latvia's Way government had just 
regained some ground in public opinion polls. The collapse of 
Baltija Bank and the ensuing financial crisis, however, seriously 
undermined its credibility. Moreover, many Latvians' patience 
with low wages and meager pension benefits had begun to wear 
thin. Foreign investment had increased and economic ties to 
the West had grown stronger, but corruption was widespread, 
and, according to official estimates, 20 percent of the popula- 
tion lived in poverty. (Unofficial estimates were much higher.) 

With 14.6 percent of the vote, Latvia's Way finished third in 
the September 30-October 1, 1995, parliamentary elections. 
The center-left Democratic Party Saimnieks was in first place 
with 15.3 percent of the vote, followed closely by the far-right 
For Latvia with 15 percent. The latter party is headed by 
Joachim Siegerist, a failed German politician facing a prison 
sentence in Germany for inciting racial hatred. His political 
success in Latvia has stunned many people both in Latvia and 
abroad. Much of Siegerist's support has come from the coun- 
try's most vulnerable citizens — young people and the elderly — 
who have been impressed by his efforts to distribute food, med- 
icine, and clothing to the needy and his promises to crack 
down on corruption, stabilize the currency, and bring Latvia 
out of its "deep misery." 

Dissatisfaction among elderly and rural voters, who had yet 
to experience the benefits of Estonia's economic revival, was an 
important factor in that country's general election in March 
1995. Political infighting and bitter disputes among members 
of former Prime Minister Mart Laar's government, as well as 
charges of corruption, were other reasons that many voters 
rejected the center-right grouping of the Fatherland Party (Isa- 
maa) and the Estonian National Independence Party, which 
received less than 8 percent of the vote. With nearly one-third 



xxiii 



(32.2 percent) of the vote, the victorious center-left Coalition 
Party-Rural Union alliance, led by former Prime Minister Tiit 
Vahi, took forty-one of the parliament's 101 seats. Next came 
the staunchly pro-market Estonian Reform Party with 16.2 per- 
cent of the vote and the moderate Estonian Center Party with 
14.2 percent. Six percent of the vote was garnered by Our 
Home is Estonia!, an alliance of two ethnic Russian parties. 
Thus, Estonia's Russophone community secured parliamentary 
representation. 

After negotiating a coalition agreement with Edgar Savisaar, 
leader of the Estonian Center Party, Vahi was confirmed as 
prime minister in April and Savisaar became minister of inte- 
rior. Although somewhat more mindful of the agrarian sector's 
concerns, the new government pursued policies essentially sim- 
ilar to those of its predecessor. In October, however, Savisaar 
was implicated in the bugging of conversations of several Esto- 
nian political leaders. Consequently, President Lennart Meri 
relieved Savisaar of his ministerial duties, and the government 
resigned. President Meri characterized the scandal as a crisis 
for democracy. Overcoming such crises posed yet another chal- 
lenge for the nascent democratic institutions of the Baltic 
states. 



October 14, 1995 

* * * 

Following preparation of this manuscript, several significant 
events occurred in the Baltic states. In Estonia, shortly after the 
resignation of the government in October 1995, President 
Meri decided against holding early elections and asked outgo- 
ing Prime Minister Vahi to form a new government. Upon 
negotiating a coalition agreement with Siim Kallas, chairman 
of the Estonian Reform Party, Vahi was confirmed as prime 
minister, and Kallas became the foreign minister. Vahi pledged 
to continue the previous policies of economic reform and inte- 
gration into European structures. He also stressed the need to 
reach an agreement with Moscow regarding the Estonian-Rus- 
sian border, which had been shifted by Soviet leader Joseph V. 
Stalin at the end of World War II, in violation of the 1920 Tartu 
Peace Treaty (see fig. 2). The issue of the validity of the 1920 



xxiv 



treaty remained unresolved, however, despite several rounds of 
border talks in late 1995 and early 1996. 

Estonian-Russian relations were complicated further in Feb- 
ruary 1996, when the Estonian Orthodox Church left the juris- 
diction of the Moscow Patriarchate and renewed canonical ties 
with the Ecumenical Patriarchate of Constantinople, the histor- 
ical center of Orthodox Christianity In protest against Ecu- 
menical Patriarch Bartholomew's decision to resume his 
patriarchate's canonical jurisdiction over the Estonian Ortho- 
dox Church, Patriarch Aleksiy of Moscow suspended relations 
between the Russian Orthodox Church and Constantinople. 
Moreover, Aleksiy accused the Estonian government, which 
had recognized the newly independent church as the legal suc- 
cessor to the pre-World War II Estonian Orthodox Church, of 
"stripping the Russian Orthodox Church of its property rights." 
At Aleksiy's behest, Russian president Boris N. Yeltsin and Rus- 
sia's Ministry of Foreign Affairs protested to the Estonian gov- 
ernment as well. 

Also in Estonia, the commander of the armed forces, Gene- 
ral Aleksander Einseln, resigned in December 1995. Einseln, a 
retired United States Army colonel, resigned at President 
Meri's demand, following a political row with Defense Minister 
Andrus Oovel. In January 1996, the Estonian parliament 
approved Meri's nomination of Colonel Johannes Kert, previ- 
ously commander of the country's paramilitary Defense 
League (Kaitseliit) , as the new commander of the armed 
forces. In a February address to the Estonian community in 
Stockholm, Einseln attacked Oovel as a communist who had 
regained power. 

In Lithuania the refusal of Prime Minister Slezevicius to 
resign after he was implicated in a banking scandal impelled 
President Brazauskas to ask the Lithuanian parliament, the Sei- 
mas, to vote in February 1996 on the dismissal of Slezevicius 
from office. The banking scandal had erupted in December 
1995, when Lithuania's two largest commercial banks, LAIB 
and Litimpex, were declared insolvent and their accounts fro- 
zen. Slezevicius prematurely terminated a fixed-term, high- 
interest account with LAIB two days before the bank's opera- 
tions were suspended, prompting media reports that he had 
used inside information to withdraw his savings and angering 
thousands of depositors. In January 1996, President Brazauskas 
asked Slezevicius to resign as prime minister, but, with the 
backing of the leadership of the ruling LDLP, Slezevicius 



xxv 




Boundary representation 
not necessarily authoritative 



Source: Based on information from Anatol Lieven, The Baltic Revolution, New Haven, 
1993, 63; andToivo V. Raun, Estonia and the Estonians, Stanford, California, 
1987, 138, 221. 

Figure 2. Estonia, Latvia, and Lithuania, 1938 

refused. In February the Seimas voted by a wide margin to 
approve a presidential decree dismissing Slezevicius. One 
month later, under pressure from many LDLP members, 
Slezevicius was also ousted as party chairman. 

After Prime Minister Slezevicius's dismissal, Brazauskas nom- 
inated Mindaugas Stankevicius for the post. Stankevicius, hith- 
erto the minister for government reform and local rule, was 
confirmed promptly. He retained twelve of the nineteen minis- 
ters who had served in the previous government, and he 
pledged to continue the policies of economic reform and inte- 
gration into the EU and other European bodies. His govern- 



xxvi 



merit's objectives included admission to NATO, the gradual 
demilitarization of the neighboring Russian exclave of Kalinin- 
grad, the reduction of Lithuania's dependence on fuel imports 
from Russia, and the bringing of Lithuania's economic legisla- 
tion into line with EU standards. Stankevicius also stated that 
he would give priority to stabilizing and strengthening Lithua- 
nia's banking system, stabilizing the national currency, reduc- 
ing inflation, and improving the social security system. 

The strengthening of relations with Poland has become a 
highlight of Lithuania's foreign policy. In March 1996, Presi- 
dent Brazauskas and his Polish counterpart, Aleksander Kwas- 
niewski, met in Vilnius to discuss a broad range of political and 
security issues. They agreed to coordinate their countries' 
efforts to gain membership in the EU and NATO, to establish 
joint airspace control, to allow mutual military overflights 
under an "open sky policy," to form a joint battalion, and to 
hold joint military exercises. The two sides also agreed to coop- 
erate in building the Via Baltica highway and a new railroad 
between Lithuania and Poland, and they reaffirmed their 
opposition to a Russian-Belarusian proposal to build a highway 
across either Lithuanian or Polish territory to the heavily mili- 
tarized Russian exclave of Kaliningrad. 

Lithuania and the neighboring Baltic country of Latvia, how- 
ever, had yet to agree on the demarcation of their common 
maritime border. The subject of their dispute is a continental 
shelf area considered rich in oil deposits, where Latvia has uni- 
laterally awarded drilling rights to a United States-Swedish joint 
venture. Latvian-Lithuanian border talks had been expected to 
begin in late 1995 but were canceled because of protracted gov- 
ernment crises in the two countries. Talks on demarcating the 
Latvian-Estonian border in the Gulf of Riga were held in Febru- 
ary 1996 in Stockholm but did not produce an agreement. 

The failure of rival political blocs in Latvia's parliament, the 
Saeima, to reach an agreement repeatedly obstructed the for- 
mation of a new government after the country's September- 
October 1995 general election. The impasse finally ended in 
December when President Guntis Ulmanis nominated Andris 
Skele as prime minister. Skele, a professional agronomist and 
successful entrepreneur, had widespread appeal as a respected 
nonpolitical figure and was confirmed shortly afterward. 

In December 1995, Latvian government representatives 
joined their counterparts from Estonia and Lithuania in 
Madrid to lobby EU leaders assembled there for equal consid- 



xxvii 



eration for admission to the EU. Some EU officials and mem- 
ber governments had favored giving priority to the Czech 
Republic, Poland, and Hungary, but the efforts of the Baltic 
governments resulted in a decision to treat the Central Euro- 
pean and Baltic countries equally. Discussions with individual 
countries are to begin after mid-1997. 

Also in December 1995, the governments of the Baltic coun- 
tries made final plans for the participation of their armed 
forces in the Bosnia peacekeeping operation under the com- 
mand of NATO. Each country will assign one platoon, which 
will become integrated with NATO forces. Before being air- 
lifted to Bosnia, the Baltic platoons will train with Danish forces 
in Denmark, a NATO country with which the Baltic countries 
have established close military cooperation. The Baltic contin- 
gent's close integration with the troops of NATO countries is 
seen by the Baltic countries as an important step toward meet- 
ing NATO military standards and toward eventually joining the 
alliance. 

The first joint military force of the three Baltic countries, the 
Baltic Battalion, held its first combat exercise in Latvia in Janu- 
ary and February 1996. It was the largest military exercise held 
in the Baltic states since they regained their independence in 
1991 and the first joint exercise of troops from the three coun- 
tries. Britain, Norway, Denmark, and Sweden provide military 
assistance to the integrated battalion. Other forms of military 
cooperation among the Baltic states are to include linking the 
three countries' airspace surveillance systems, engaging in joint 
mine-laying and mine-sweeping operations in the Baltic Sea, 
and harmonizing equipment and logistics. Moreover, in March 
1996 senior naval officials of Estonia, Latvia, and Lithuania met 
in Tallinn to discuss plans for the formation of a joint naval 
squadron and joint naval training groups. 

Safeguarding their security continues to be the foremost 
concern of the Baltic states. At a briefing after the first exercise 
of the Baltic Battalion, the defense ministers of Estonia, Latvia, 
and Lithuania reaffirmed their countries' common goal of 
joining NATO. Recent developments in Russia, most notably 
the Russian Duma's nonbinding resolution of March 15, 1996, 
declaring the dissolution of the Soviet Union illegal, have rein- 
forced the fear of Russian revanchism. Estonian foreign minis- 
ter Kallas characterized the action by the communist- 
dominated lower house of the Russian parliament as "an inten- 



xxviii 



tion to recreate the Soviet Union, which would pose a threat to 
the entire world. The world should be concerned, not just us." 

March 20, 1996 Walter R. Iwaskiw 



XXIX 



Chapter 1. Estonia 




Toompea Castle, Tallinn 



Country Profile 



Country 

Formal Name: Republic of Estonia (Eesti Vabariik). 
Short Form: Estonia (Eesti). 
Term for Citizen(s): Estonian (s). 
Capital: Tallinn. 

Date of Independence: During abortive Soviet coup, declared 
immediate full independence August 20, 1991; Soviet Union 
granted recognition September 6, 1991. February 24, Inde- 
pendence Day, national holiday; on this day in 1918, inde- 
pendent Republic of Estonia proclaimed. 

Geography 

Size: 45,226 square kilometers (land area 43,200 square kilo- 
meters), slightly larger than Vermont and New Hampshire 
combined; includes 1,520 islands in Baltic Sea. 

Topography: Mostly low-lying land with many lakes, rivers, and 
forests. Forest 1.8 million hectares, arable land 926,000 
hectares, meadows 252,000 hectares, and pastureland 181,000 
hectares. Highest elevation 318 meters. 

Climate: Temperate, influenced by Eurasian land mass to east, 
Baltic Sea to west, and North Atlantic Ocean farther west. Cool 
summers and mild winters. Rainfall moderate, averaging about 
568 millimeters per year. 

Society 

Population: 1,506,92V (1994 estimate). Population declined in 
early 1990s because of negative natural growth rates and net 
out-migration. In 1993 birth rate 10.0 per 1,000 population; 
death rate 14.0 per 1,000 population. Total fertility rate 2.0 



3 



Estonia, Latvia, and Lithuania: Country Studies 

children per woman in 1994. Population density 33.7 persons 
per square kilometer. Life expectancy 70.0 years in 1994 (65.0 
years for males and 75.2 years for females). 

Ethnic Groups: According to 1989 census, Estonians 61.5 
percent, Russians 30.3 percent, Ukrainians 3.1 percent, 
Belorussians 1.7 percent, Finns 1.1 percent, and others 
(including Jews, Tatars, Germans, Latvians, and Poles) 2.3 
percent. In 1994 estimates of Estonian and Russian groups 63.9 
percent and 29.0 percent, respectively. 

Languages: Official language Estonian; Russian, Ukrainian, 
Belarusian, Finnish, and other languages also used. 

Religion: Predominantly Evangelical Lutheran. Other denomi- 
nations include Orthodox Christian, Old Believer, Methodist, 
Baptist, Seventh-Day Adventist, Jewish, and Roman Catholic. 

Education: Estonian-language schools have twelve years of 
education (nine in elementary schools and three in secondary 
schools). Russian-language education lasts eleven years. 
Education compulsory to ninth grade. In 1993 some 215,000 
elementary and secondary school students in 724 schools. 
About 142,000 students enrolled in Estonian-language schools 
and 70,000 in Russian-language schools. Individual schools 
offered instruction in other languages as well. Seventy-seven 
vocational schools, in which about 26,000 students enrolled. 
Literacy nearly universal. According to 1989 census results, 
99.7 percent of adult population literate. 

Health and Welfare: In 1992 thirty-two doctors and ninety-two 
hospital beds per 10,000 inhabitants, but shortage of auxiliary 
staff. Retirement pensions very low (about EKR260 per 
month); other welfare benefits include financial support for 
invalids, low-income families, and families having three or 
more children. 

Labor Force: 785,500 (August 1994); industry 33 percent, 
agriculture 12 percent, education and culture 10 percent, 
construction 10 percent. Services sector, accounting for 44.7 
percent of employment, was the most developed in former 
Soviet Union and is expected to expand. 



4 



Estonia 



Economy 

Gross National Product (GNP): Estimated at US$4.7 billion in 
1993: per capita income US$3,040. Gross domestic product 
(GDP) declined from 8,681 million Russian rubles (as 
expressed in 1990 Russian rubles) in 1989 to 5,320 million 
Russian rubles in 1993. Annual rate of inflation, which had 
averaged 3.3 percent in 1980s, jumped to 1,000 percent in 
1992. By 1993 government's radical budgetary and monetary 
reform program had reduced rate of inflation substantially to 
an average of 2 to 3 percent per month. Rate of inflation 
averaged 3.5 percent per month in 1994. Annual decline in 
output, recorded in all sectors in 1991-92, slowed in 1993 and 
reversed in 1994. Real GDP grew by an estimated 5.0 percent in 
1994. 

Agriculture: Sector small but largely self-sufficient; in 1991 
contributed 15.4 percent of GDP and 12 percent of 
employment. Fishing and animal husbandry among main 
activities. About 30 percent of land cultivable; principal crops 
grains, potatoes, and vegetables. Agricultural production 
declined by an estimated 19 percent in 1992 and by 22 percent 
in 1993. 

Industry: 42.5 percent of GDP in 1992; main products elec- 
tricity, oil shale, chemical products, electric motors, textiles, 
furniture, cellulose and paper products, building materials, 
ships, and processed foods. Industrial production estimated to 
have declined by 39 percent from 1991 to 1992, and by 27 
percent in 1993. Overall output increased by an estimated 7 
percent in 1994. 

Energy: Produces roughly 23 million tons of oil shale per year; 
exports electrical energy but depends heavily on imports of oil 
and natural gas. 

Exports: US$827 million (1993 estimate). Major commodities 
foodstuffs and animal products, textiles and footwear, base 
metals and jewelry, minerals, glassware, wood products, 
furniture, and machinery. 

Imports: US$902 million (1993 estimate). Major commodities 



5 



Estonia, Latvia, and Lithuania: Country Studies 

machinery and transport equipment, mineral products, tex- 
tiles, food products, and fuel. 

Major Trading Partners: Finland, Russia, Germany, Latvia, 
Lithuania, Netherlands, Denmark, Ukraine, Japan, and United 
States. 

Currency and Exchange Rate: 1 kroon (EKR) = 100 cents; 
pegged to German deutsche mark (DM) within 3 percent of 
EKR8 = DM1. In March 1996, EKR11.83 = US$1. 

Fiscal Year: Calendar year. 

Transportation and Telecommunications 

Roads: 30,300 kilometers total; 29,200 kilometers with hard 
surface, 1,100 kilometers unpaved. Bus routes exist to Poland, 
Germany, and Denmark. Bus and taxi service within Tallinn 
and surrounding area good. Rental automobiles available. 

Railroads: 1,126 kilometers of railroads, of which 132 
kilometers electrified (1993). Chief center Tallinn. Main lines 
link Tallinn with Narva and St. Petersburg, Tartu with Pskov 
(Russia), and Parnu with Riga (Latvia). Train service available 
to Moscow, St. Petersburg, and Warsaw. 

Civil Aviation: Service to many international destinations from 
Ulemiste International Airport at Tallinn, as well as domestic 
flights to Estonian islands. National carrier Estonian Air, which 
had sixteen former Soviet aircraft in 1992 and operated flights 
to Amsterdam, Copenhagen, Frankfurt, Helsinki, Kiev, Minsk, 
Moscow, Riga, St. Petersburg, Sochi (Russia), Stockholm, and 
Vilnius. Service also provided by Aeroflot, Drakk Air Lines, 
Finnair, Lithuanian Airlines, Lufthansa, and SAS (Scandi- 
navian Airlines). 

Shipping: 500 kilometers of inland waterways navigable year 
round. Inland port Narva; maritime ports Parnu and Tallinn. 
Twenty main ports, but Tallinn handles four-fifths of ocean- 
going transport. Ice-free port of Muuga, near Tallinn, is 
underused modern facility with good transshipment capability, 
high-capacity grain elevator, refrigerated/frozen storage, and 
oil tanker off-loading facilities. Excellent Tallinn-Helsinki and 



6 



Estonia 



Tallinn-Stockholm ferry links exist year round. 

Telecommunications: One television set per 2.6 persons; one 
radio per 1.7 persons; one telephone per 3.9 persons. Three 
radio stations and three television stations. 

Government and Politics 

Government: Parliamentary democracy. President, elected for 
term of five years, is head of state and supreme commander of 
armed forces. Riigikogu (parliament), with 101 members, has 
broad organizational legislative functions. Members elected in 
direct elections for term of four years. Candidate for prime 
minister forms new government (no more than fifteen 
ministers) after Riigikogu has approved basis for its formation; 
after selection, president formally appoints government, which 
has executive power. 

Judicial System: Post-Soviet criminal code introduced in 1992, 
based on civil law system, with no judicial review of legislative 
acts. Death penalty retained for murder and terrorism. Legal 
chancellor, appointed by Riigikogu, provides guidance on 
constitutionality of laws but has no powers of adjudication. 
Criminal justice administered by local first-level courts as well 
as second-level appellate courts. Final appeal may be made to 
National Court, which sits in Tartu. Court system comprises 
rural and city, as well as administrative, courts (first-level); 
district courts (second-level); and National Court, highest 
court in land. 

Politics: First post-Soviet elections, held in September 1992, 
yielded center-right coalition government led by Fatherland 
Party (Isamaa). Isamaa-led coalition disintegrated in June 
1994. Center-left Coalition Party-Rural Union Alliance vic- 
torious in March 1995 elections. 

Administrative Divisions: Fifteen counties (maakonnad) , 
subdivided into 255 local administrative units, of which forty- 
two are towns and 213 are townships (vald). 

Foreign Relations: In September 1991, Estonia joined United 
Nations (UN) and Conference on Security and Cooperation in 



7 



Estonia, Latvia, and Lithuania: Country Studies 

Europe (in January 1995, name changed to Organization for 
Security and Cooperation in Europe) and is a signatory to a 
number of UN organizations and other international agree- 
ments. In February 1994, Estonia joined Partnership for Peace 
program of North Atlantic Treaty Organization. Member of 
Council of Europe and Council of the Baltic Sea States. Coop- 
eration with European Union includes significant economic 
aid as well as talks on a free-trade agreement. Relations with 
Russia remain cool. 

National Security 

Armed Forces: Following establishment of Ministry of Defense 
in April 1992, Estonia began to form independent armed 
forces. In 1994 total armed forces numbered 3,000, including 
army (2,500) and navy (500). Also reserve militia of about 
6,000. Paramilitary border guard of 2,000 under command of 
Ministry of Interior. Military service lasts twelve months. By end 
of 1993, fewer than 3,500 Russian troops remained in Estonia; 
last Russian troops withdrawn in August 1994. 

Military Budget: About EKR250 million allocated for defense 
in 1994. 



8 




Figure 3. Estonia, 1995 



10 



ESTONIA'S FOUR-YEAR STRUGGLE for sovereignty and 
independence from the Soviet Union culminated in victory in 
August 1991. A failed coup d'etat in Moscow was followed by a 
final declaration of freedom in the Estonian capital, Tallinn, 
and by worldwide recognition of the country's renewed state- 
hood a few days later. The determination of the Estonians to 
regain their independence, lost since 1940, had been pro- 
claimed by artist and future politician Heinz Valk in 1988: 
"One day we will win in the end!" ("Ukskord me voidame 
niikuinii!"). Indeed, when victory came, it was at a surprisingly 
low cost. Unlike Latvia and Lithuania, Estonia suffered no casu- 
alties in its independence struggle. Unlike Lithuania, Estonia 
was spared any direct economic blockade by Moscow. Unlike 
most secessionist campaigns, that of Estonia, like those of the 
other Baltic states, enjoyed the tacit support and acknowledg- 
ment of Western governments, which had not recognized the 
incorporation of the Baltic states into the Soviet Union a half- 
century earlier and which supported their right to seek redress. 
The events of 1988-91 were in many ways a process of advanc- 
ing step by step, keeping the pressure on a wavering Soviet 
Union and laying the groundwork for a leap to statehood. 

In campaigning for independence, most Estonians were 
intent on escaping and reversing their Soviet past: years of sti- 
fling social and political rule, growing economic inefficiency 
and languor, cultural deprivation under a policy of Russifica- 
tion, and increasing environmental waste and destruction. This 
was the sentiment that came forth in the "singing revolution" 
of 1988, when Estonians gathered in large, peaceful rallies to 
sing their national songs and give voice to their pent-up frustra- 
tions. At the same time, the Estonians were equally intent on a 
future as an independent nation enjoying economic prosperity 
in a post-Cold War Europe. 

In the mid-1990s, several years after independence, Estonia's 
past as a Soviet republic was proving itself a legacy that could 
not easily be put aside. The challenges Estonians faced 
included integrating a 500,000-strong Russophone population 
that was largely the product of Soviet-era immigration policy, as 
well as restructuring an economy that had been developed 
along impractical guidelines dictated by an overbearing center. 
The future, meanwhile, was not unfolding entirely as had been 



11 



Estonia, Latvia, and Lithuania: Country Studies 

expected. The process of regaining prosperity by means of eco- 
nomic shock therapy was beginning to tear at the fabric of Esto- 
nian society, which, despite Soviet rule, had achieved a certain 
equilibrium since the 1960s. Widening gaps between the newly 
rich and the newly poor were putting a strain on the Estonians' 
erstwhile social cohesion. On the diplomatic front, a new 
Europe and genuine Estonian sovereignty also were proving 
slow to materialize. Estonia's proximity to vast Russia was still a 
given, despite a desire to be rid of Russian influence once and 
for all. Post-Cold War Europe calculated its policies with an eye 
to the superpower to the east just as much as it had in the days 
when the Soviet Union was still intact. Still, as Estonia marked 
four years of independence in 1995, domestic peace and a 
measured pace of progress — the hallmarks of the indepen- 
dence struggle — had been maintained; these two factors 
offered the best guarantee of the country's continued advance- 
ment. 

Historical Setting 
Early History 

Estonia's struggles for independence during the twentieth 
century were in large part a reaction to nearly 700 years of for- 
eign rule. Before 1200 the Estonians lived largely as free peas- 
ants loosely organized into parishes (kihelkonnad) , which in 
turn were grouped into counties (maakonnad) . In the early 
1200s, the Estonians and the Latvians came under assault from 
German crusaders seeking to impose Christianity on them. 
Although the Estonians' resistance to the Teutonic Knights 
lasted some twenty years, the lack of a centralized political 
organization as well as inferior weaponry eventually brought 
down the Estonians in 1227. The Germans, moving from the 
south, were abetted by Danish forces that invaded from the 
north and captured Tallinn. Together with present-day Latvia, 
the region became known as Livonia; the Germans and Danes 
settled down as nobility, and the Estonians were progressively 
subordinated as serfs. During 1343-45 an Estonian peasant 
uprising against the German and Danish nobility prompted the 
Danes to relinquish their control of northern Estonia to the 
Germans. After this resistance was crushed, the area remained 
generally peaceful for two centuries. 

Commerce developed rapidly because Estonia's larger urban 
centers at the time — Tallinn, Tartu, Parnu, and Narva — were 



12 



Anti-Soviet demonstration on the fiftieth anniversary of the Nazi- 
Soviet Nonaggression Pact, Tallinn, 1989 
St. George's Eve commemoration of 1343-45 rebellion by Estonian 
peasants against their German and Danish overlords, Tallinn, 1991 

Courtesy Priit Vesilind 



13 



Estonia, Latvia, and Lithuania: Country Studies 

all members of the Hanseatic League, an organization estab- 
lished by merchants of various, mostly German, cities to protect 
their mutual trading interests. Still, foreign rivalries over the 
strategic Livonian region began to reemerge in the mid-six- 
teenth century as the fighting capacity of the Germans dimin- 
ished and that of neighboring Muscovy began to increase. The 
ensuing twenty-five-year struggle for control of Livonia was pre- 
cipitated by an invasion by Ivan IV (the Terrible) (r. 1533-84) 
in 1558. The advancing Russians wiped out the disintegrating 
forces of the Teutonic Knights and nearly succeeded in con- 
quering the whole area. However, Swedish and Polish interven- 
tion reversed the Russian gains and forced Ivan eastward, back 
behind Lake Peipsi. Peace between Sweden and Poland in 
Livonia was also slow in coming, with Sweden eventually win- 
ning most of the territory by 1629. By this time, decades of war 
had caused huge population losses (in some areas, over 50 per- 
cent) , affecting urban and rural areas alike. 

Under Swedish rule, northern Estonia was incorporated into 
the Duchy of Estland. The southern part, together with north- 
ern Latvia, became known as Livland. This division of Estonian 
lands would last until 1917. The German-based nobility in both 
areas retained and even strengthened its position under Swed- 
ish suzerainty. Meanwhile, the Estonian peasants saw their lot 
worsen as more and more of their land and output were appro- 
priated by seigniorial estates. Still, during the Swedish era, 
Estonian education got its start with the founding of Tartu Uni- 
versity in 1632 and the establishment of the first Estonian par- 
ish schools in the 1680s. Although the population also began to 
grow during this period of peace, war and suffering once again 
were not far away. Swedish hegemony during the late seven- 
teenth century had become overextended, making the Swedes' 
holdings a prime target for a newly expansionist Russia. 

In his first attempt to conquer Estland and Livland, during 
the Great Northern War (1700-09), Peter I (the Great) (r. 
1682-1725) met with defeat at Narva at the hands of Sweden's 
Charles XII (r. 1697-1718). A second campaign in 1708 saw 
Peter introduce a scorched-earth policy across many parts of 
the area. The outcome was victory for Russia in 1 710 and acqui- 
sition of a "window to the West." In taking control of Estland 
and Livland for what would be the next 200 years, tsarist Russia 
recognized the rights and privileges of the local German nobil- 
ity, whose members amounted to only a small fraction of the 
population. Although the extent of the nobles' autonomy in 



14 



Estonia 



the two areas was always contested, especially under Catherine 
II (the Great) (r. 1762-96), the Baltic Germans did develop a 
strong loyalty to the Russian tsars as guarantors of their landed 
privileges. German control over the Estonian peasantry 
reached its high point during the eighteenth century. Labor 
overtook taxes-in-kind as the predominant means of control- 
ling the serfs. The first real reforms of serfdom, which gave 
peasants some rights, took place in 1804. In 1816 and 1819, the 
serfs were formally emancipated in Estland and Livland, 
respectively. 

By the mid-nineteenth century, the Estonians were fast 
developing into an independent society and nation. The num- 
ber of urbanized Estonians had grown considerably, overtaking 
what had been German majorities in the cities. Industrializa- 
tion was also breaking down the old order. An Estonian cul- 
tural awakening began in the 1850s and 1860s (see Religion; 
Language and Culture, this ch.). Tsarist reaction and a fierce 
Russification campaign in the 1880s could not extinguish the 
new Estonian spirit, although for the most part Estonian 
demands continued to focus on culture. Political demands for 
Estonian autonomy found strong expression during the Revo- 
lution of 1905, and an All-Estonian Congress was organized in 
Tartu that same year. Although radical Estonian politicians 
such as Jaan Teemant and moderate leaders such as Jaan Tonis- 
son were deeply divided on tactics, there were widespread calls 
from the Estland and Livland provinces for a unification of 
Estonian lands and an official end to Russification. Repression 
of the 1905 movement was severe in Estland, although Tonis- 
son's moderate Estonian Progressive People's Party survived 
and went on to participate in Russia's new assembly, the Duma. 
Amid the turmoil, Baltic Germans also grew apprehensive; they 
would be upset even more with the outbreak of World War I, 
which would pit Russia against their conationals. 

The fall of the tsarist regime in February 1917 forced the 
issue of Estonia's political future. Vigorous lobbying in Petro- 
grad by Tonisson and the large Estonian population living 
there forced the provisional government to accept Estonia's 
territorial unification as one province and the election of a pro- 
vincial assembly, the Maapaev, later that year. The election 
results showed significant support for leftist parties, including 
the Bolsheviks, Social Democrats, and Social Revolutionaries. 
Voting was complicated, however, by the presence of numerous 
military personnel from outside Estonia. 



15 



Estonia, Latvia, and Lithuania: Country Studies 

The Bolshevik takeover in Petrograd in November 1917 
extended to Estonia as well, until Germany occupied Estonia in 
February 1918. Most of Estonia's other political parties realized 
they were caught between the two forces and agreed to begin 
an active search for outside support. Representatives were sent 
to the major European capitals to secure Western recognition 
of an Estonian declaration of independence. As the Bolsheviks 
retreated from Tallinn and the German occupation army 
entered the city, the Committee of Elders (or standing body) of 
the Maapaev declared the country independent on February 
24, 1918. 

Interwar Independence, 1918-40 

In contrast to its later peaceful return to independence in 
1991, Estonia's first modern era of sovereignty began with a fif- 
teen-month war (1918-20) against both Russian Bolshevik and 
Baltic German forces. In the end, the War of Independence 
took the lives of about 3,600 Estonians and left about 14,000 
wounded. In the Tartu Peace Treaty, which was concluded with 
Russia in February 1920, Moscow relinquished all claims to 
Estonia in perpetuity. A year later, Estonia gained international 
recognition from the Western powers and became a member 
of the League of Nations. In June 1920, Estonia's first constitu- 
tion was promulgated, establishing a parliamentary system. 

With a political system in place, the new Estonian govern- 
ment immediately began the job of rebuilding. As one of its 
first major acts, the government carried out an extensive land 
reform, giving tracts to small farmers and veterans of the War 
of Independence. The large estates of the Baltic German nobil- 
ity were expropriated, breaking its centuries-old power as a 
class. 

Agriculture dominated the country's economy. Thanks to 
land reform, the number of small farms doubled to more than 
125,000. Although many homesteads were small, the expansion 
of landownership helped stimulate new production after the 
war. Land reform, however, did not solve all of Estonia's early 
problems. Estonian agriculture and industry (mostly textiles 
and machine manufacturing) had depended heavily on the 
Russian market. Independence and Soviet communism closed 
that outlet by 1924, and the economy had to reorient itself 
quickly toward the West, to which the country also owed signifi- 
cant war debts. The economy began to grow again by the late 
1920s but suffered another setback during the Great Depres- 



16 



Estonia 



sion, which hit Estonia during 1931-34. By the late 1930s, how- 
ever, the industrial sector was expanding anew, at an average 
annual rate of 14 percent. Industry employed some 38,000 
workers by 1938. 

Independent Estonia's early political system was character- 
ized by instability and frequent government turnovers. The 
political parties were fragmented and were about evenly 
divided between the left and right wings. The first Estonian 
constitution required parliamentary approval of all major acts 
taken by the prime minister and his government. The 
Riigikogu (State Assembly) could dismiss the government at 
any time, without incurring sanctions. Consequently, from 
1918 to 1933 a total of twenty-three governments held office. 

The country's first big political challenge came in 1924 dur- 
ing an attempted communist takeover. In the depths of a 
nationwide economic crisis, leaders of the Estonian Commu- 
nist Party (Eestimaa Kommunistlik Partei — EKP), in close con- 
tact with Communist International (Comintern — see Glossary) 
leaders from Moscow, believed the time was ripe for a workers' 
revolution to mirror that of the Soviet Union. On the morning 
of December 1, some 300 party activists moved to take over key 
government outposts in Tallinn, while expecting workers in the 
capital to rise up behind them. The effort soon failed, however, 
and the government quickly regained control. In the after- 
math, Estonian political unity got a strong boost, while the 
communists lost all credibility. Relations with the Soviet Union, 
which had helped to instigate the coup, deteriorated sharply. 

By the early 1930s, Estonia's political system, still governed 
by the imbalanced constitution, again began to show signs of 
instability. As in many other European countries at the time, 
pressure was mounting for a stronger system of government. 
Several constitutional changes were proposed, the most radical 
being put forth by the protofascist League of Independence 
War Veterans. In a 1933 referendum, the league spearheaded 
replacement of the parliamentary system with a presidential 
form of government and laid the groundwork for an April 
1934 presidential election, which it expected to win. Alarmed 
by the prospect of a league victory and possible fascist rule, the 
caretaker prime minister, Konstantin Pats, organized a pre- 
emptive coup d'etat on March 12, 1934. In concert with the 
army, Pats began a rule by decree that endured virtually with- 
out interruption until 1940. He suspended the parliament and 
all political parties, and he disbanded the League of Indepen- 



17 



Estonia, Latvia, and Lithuania: Country Studies 

dence War Veterans, arresting several hundred of its leaders. 
The subsequent "Era of Silence" initially was supported by most 
of Estonian political society. After the threat from the league 
was neutralized, however, calls for a return to parliamentary 
democracy resurfaced. In 1936 Pats initiated a tentative liberal- 
ization with the election of a constituent assembly and the 
adoption of a new constitution. During elections for a new par- 
liament, however, political parties remained suspended, except 
for Pats' s own National Front, and civil liberties were only 
slowly restored. Pats was elected president by the new parlia- 
ment in 1938. 

The Soviet Era, 1 940-85 

Although the period of authoritarian rule that lasted from 
1934 to 1940 was a low point in Estonian democracy, in per- 
spective its severity clearly would be tempered by the long 
Soviet era soon to follow. The clouds over Estonia and its inde- 
pendence began to gather in August 1939, when Nazi Germany 
and the Soviet Union signed the Nazi-Soviet Nonaggression 
Pact (also known as the Molotov-Ribbentrop Pact), dividing 
Eastern Europe into spheres of influence. Moving to capitalize 
on its side of the deal, the Soviet Union soon began to pressure 
Estonia, Latvia, and Lithuania into signing the Pact of Defense 
and Mutual Assistance, which would allow Moscow to station 
25,000 troops in Estonia. President Pats, in weakening health 
and with little outside support, acceded to every Soviet 
demand. In June 1940, Soviet forces completely occupied the 
country, alleging that Estonia had "violated" the terms of the 
mutual assistance treaty. With rapid political maneuvering, the 
regime of Soviet leader Joseph V. Stalin then forced the instal- 
lation of a pro-Soviet government and called for new parlia- 
mentary elections in July. The Estonian Communist Party, 
which had only recently reemerged from underground with 
fewer than 150 members, organized the sole list of candidates 
permitted to run. Pats and other Estonian political leaders 
meanwhile were quietly deported to the Soviet Union or killed. 
With the country occupied and under total control, the com- 
munists' "official" electoral victory on June 17-18 with 92.8 per- 
cent of the vote was merely window dressing. On July 21, the 
new parliament declared Estonia a Soviet republic and 
"requested" admission into the Soviet Union. In Moscow, the 
Supreme Soviet granted the request on August 6, 1940. 



18 



Estonia 



For all the ups and downs Estonia's independent govern- 
ment experienced during the interwar period, its termination 
by Stalin in 1940 was clearly not among the range of solutions 
favored by most Estonians. Yet, chances of holding off the 
Soviet onslaught with an army numbering about 15,000 men 
were slim at best. Thus, Estonia's only real hope for the future 
lay in continued Western recognition of its de jure statehood, 
which other European countries and the United States 
declared in 1940. Over the next fifty years, this Western policy 
of token recognition nearly fell into desuetude. Yet, the policy's 
survival into the late 1980s would allow it to become a rallying 
point for Estonia's new drive for independence. Thanks to this 
continuing Western recognition, Estonia's calls for sovereignty 
from Moscow by early 1990 could not be considered merely 
secessionism. Rather, they represented demands for the resto- 
ration of a state still existent under international law. This 
appeal to international legality dating to 1940 would frustrate 
the attempts of Soviet leader Mikhail S. Gorbachev to control 
Estonia and the other Baltic states in the late 1980s. 

Estonia's absorption into the Soviet Union as the Estonian 
Soviet Socialist Republic was interrupted in June 1941 by the 
German invasion. Still, that one year of Soviet rule left a deep 
mark on the Estonians. In addition to the takeover of their 
country and the rapid nationalization of their capitalist econ- 
omy, on June 13-14, 1941, before the German invasion, Esto- 
nians also saw the mass deportation of some 10,000 of their 
countrymen to Siberia. Of those seized during the one-night 
operation, over 80 percent were women, children, or elderly 
people. The purpose of this action seemed to be to create ter- 
ror rather than to neutralize any actual threat to the regime. 
The 1941-44 German occupation witnessed more repression, 
especially of Estonia's Jewish population, which numbered 
about 2,000. In September 1944, as the Red Army again neared 
Estonia, the memories of Soviet rule resurfaced vividly enough 
to prompt some 70,000 Estonians to flee the country into exile. 
These emigres later formed ethnic communities in Sweden, 
the United States, Canada, Britain, Australia, and elsewhere, 
continuing to lobby for Estonia's rights during the next fifty 
years. Altogether, from 1939 to 1945 Estonia lost over 20 per- 
cent of its population to the turmoil of Soviet and German 
expansionism. 

After the war, the Sovietization of Estonia resumed. The 
republic's war-ravaged industry was rebuilt as a component of 



19 



Estonia, Latvia, and Lithuania: Country Studies 

the centrally planned economy. Agricultural collectivization 
was enforced, climaxing in March 1949 with another, more 
brutal wave of deportations involving some 25,000 people. The 
Estonian Communist Party was purged in 1950 of many of its 
original native leaders; they were replaced by several promi- 
nent Russified Estonians who had grown up in Russia. After 
Stalin's death in 1953, Nikita S. Khrushchev's liberalization also 
touched Estonia. Efforts at economic reform were undertaken, 
and repression was eased. By the late 1960s, consumerism had 
taken root, and intellectual life was relatively vibrant. Following 
the Soviet Union's suppression of Czechoslovakia's "Prague 
Spring" reform movement in 1968, the trend toward openness 
suffered a reversal, but Estonia continued to maintain a stan- 
dard of living well above the Soviet average. In 1980, during the 
period of stagnation under Soviet leader Leonid I. Brezhnev, 
some 2,000 schoolchildren demonstrated in the streets of 
Tallinn against a major Russification campaign launched from 
Moscow. Several dozen Estonian intellectuals later came 
together to write their own protest letter, but to no avail. Karl 
Vaino, the Russified Estonian leader of the Estonian Commu- 
nist Party at the time, was particularly hostile toward dissent of 
any kind. 

The Pursuit of Independence, 1985-91 

The dawning of glasnost (see Glossary) and perestroika (see 
Glossary) in the Soviet Union initiated a period of liberaliza- 
tion from which the dying superpower would never recover. 
Estonia seized on this opportunity in 1987, beginning with pub- 
lic protests against a phosphorus-mining project proposed by 
the central government that would have seriously damaged the 
country's environment. Pressure for economic reform became 
acute later in the year when a group of four Estonian liberals 
put forth a plan for economic autonomy for the republic. In 
1988 Estonia's "singing revolution" took off, energized by the 
removal of Karl Vaino as Estonian Communist Party chief in 
June and his replacement by a native son, Vaino Valjas. In April 
the Estonian Popular Front was founded as the capstone to a 
summer of political activity unparalleled since 1940. This mobi- 
lization proved effective in November when Estonia opposed 
attempts by Gorbachev to strengthen central authority through 
changes in the Soviet Union's constitution. In an act of defi- 
ance, the Estonian parliament, then known as the Supreme 
Soviet, declared the republic's right to sovereignty on Novem- 



20 



Estonia 



ber 16. It also called for a new union treaty to be drawn up to 
govern the Soviet state. 

By the spring of 1989, Estonia had thrown down the gaunt- 
lets of political sovereignty and economic autonomy. A two-year 
effort to force their acceptance by Moscow followed. On the 
political front, Estonia's strongest strategy was to invoke history. 
At the Soviet Union's first Congress of People's Deputies (see 
Glossary) in Moscow, in 1989, Estonian and other Baltic depu- 
ties battled with Gorbachev to have the Soviet Union reveal the 
true story of the Nazi-Soviet Nonaggression Pact in time for the 
fiftieth anniversary of the pact in August. Just days before the 
anniversary, a commission charged with studying the pact con- 
cluded that secret protocols dividing up Poland and the Baltic 
states had indeed existed. Armed with this finding, Estonia lit- 
erally linked up with its Baltic neighbors on August 23 to form 
a 600-kilometer human chain from Tallinn to the Lithuanian 
capital, Vilnius, to draw worldwide attention to the anniversary 
of the pact and to their cause. An estimated 2 million Baltic res- 
idents participated in the show of unity, but the action also elic- 
ited a harsh rebuke from Moscow several days later. Tensions 
quickly mounted in Estonia, and the Estonian Popular Front 
decided to cancel a major song festival and rally planned for 
early September. In early August, Estonian nationalists had 
already been shaken by their first confrontation with Soviet loy- 
alists. Members of the International Movement of Workers in 
the Estonian Soviet Socialist Republic (Intermovement), pri- 
marily made up of ethnic Russians, had staged strikes in Tallinn 
and northeastern Estonia protesting a set of new electoral rules 
and a new language law requiring all service workers to speak 
both Estonian and Russian. Many Russians in Estonia, fearful 
of growing Estonian national feeling and of losing their privi- 
leges, looked to Moscow for help. But direct intervention 
would not come. 

Throughout the fall, independence sentiment continued to 
mount. In October the Estonian Popular Front issued a cam- 
paign platform for upcoming municipal elections in which it 
publicly endorsed full independence. Meanwhile, more radical 
groups had begun organizing their own campaign to restore 
independence, completely bypassing the Soviet system. These 
groups, known as Estonian Citizens Committees, maintained 
that because their country had been illegally occupied and 
annexed by the Soviet Union and because the prewar republic 
still retained international recognition, it could not legitimate 



21 



Estonia, Latvia, and Lithuania: Country Studies 

Soviet authority by negotiating "secession." Rather, Estonia had 
to insist on the continuing legal authority of the prewar repub- 
lic as the only sure way to ward off Soviet attempts to keep it in 
the union. By invoking international law, Estonia could also 
enlist Western support and protection at a time when the 
Soviet Union needed good relations with the West to facilitate 
its own reforms. By the fall of 1989, it was clear that this argu- 
ment and strategy would become essential to the indepen- 
dence movement and, indeed, to politics thereafter. 

To raise popular awareness of the independence issue, the 
Estonian Citizens Committees mounted a year-long campaign 
to register all citizens of the prewar republic and their descen- 
dants. Of an estimated 1 million such citizens, the grassroots 
movement succeeded in registering about 700,000. It was this 
electorate that, according to the radical committees, possessed 
the sole right to decide the future of Soviet-occupied Estonia — 
not the Soviet-era Supreme Soviet, its government, or even the 
half-million Soviet-era immigrants to Estonia and their descen- 
dants, whom the committees claimed had taken up residence 
under the terms of the Soviet occupation and who would later 
be denied automatic citizenship. Rather, the committees 
asserted the need to elect a new representative body to lead the 
independence struggle and the restoration of the prewar 
republic. In February 1990, they organized nationwide elec- 
tions for a Congress of Estonia, which held its first session the 
following month. 

Although their campaign enabled the citizens committees 
and the Congress to gain a fair amount of popular support, 
most Estonians were not totally willing to forsake the Supreme 
Soviet because it, too, was up for election in March 1990. The 
more moderate Estonian Popular Front favored the Supreme 
Soviet as a more realistic path to independence. The Estonian 
Popular Front campaigned heavily in March and won about 
forty of the 101 seats. The Supreme Soviet elections also 
allowed all residents of Estonia to vote, including Soviet-era 
immigrants and their descendants. These were mostly Russians 
who, still led primarily by Estonian Communist Party function- 
aries, finally elected a total of twenty-seven pro-Soviet deputies. 
Although the two-thirds Estonian majority consequently was 
slim, it was enough for the Supreme Soviet to declare at its first 
full session, on March 30, the country's official intention to 
reestablish its independence. 



22 



Estonia 



Unlike Lithuania's declaration of independence, Estonia's 
declaration was not an outright break with the Soviet Union. 
Rather, it was an attempt to find a compromise between the 
radical Congress of Estonia and moderate Estonian Popular 
Front positions. Still, the message of asserting independence 
from Moscow was the same. The Kremlin's reaction was sub- 
dued; no economic sanctions were imposed on Estonia. Nei- 
ther, however, was any recognition accorded Estonia's dec- 
laration, nor were any serious attempts made to begin talks 
with the new government in Tallinn. In the meantime, there- 
fore, Estonia attempted to shore up its stance by finding new 
allies and initiating independent economic policies. In May 
1990, the leaders of Estonia, Latvia, and Lithuania met for- 
mally in Tallinn to coordinate their strategy. In July representa- 
tives of the three countries met for the first time with Boris N. 
Yeltsin, who had just been elected chairman of the Russian 
Supreme Soviet. Estonian politicians and government officials 
traveled in Western Europe and the United States to renew 
Western contacts. 

Domestically, in the fall of 1990 the Estonian government, 
led by Estonian Popular Front leader Edgar Savisaar, began a 
series of moves to assert the republic's economic independence 
and begin market reforms. Financial contributions to the all- 
union budget were stopped, and wide-ranging price reform 
was initiated. Plans for a separate currency, begun in 1989, con- 
tinued to be worked on. In October the government dis- 
patched militia forces to patrol the republic's border with 
Russia and to control the movement of goods; control over 
western gateways remained under Soviet control. 

Moscow's bloody military assault on civilians in Vilnius and 
Riga in January 1991 sent shock waves through Estonia as well. 
Although there were no violent incidents in Estonia, Soviet loy- 
alists staged a noisy demonstration in Tallinn, and the govern- 
ment installed huge boulders in front of the parliament 
building for protection. On January 12, Tallinn was the site of a 
hastily organized summit meeting between the Baltic leaders 
and Yeltsin, who supported the sovereignty of the three repub- 
lics against Gorbachev. Yeltsin and Estonian parliament chair- 
man Arnold Ruiitel signed a bilateral treaty recognizing the 
sovereignty of each other's republic. When, later in the month, 
Gorbachev announced a nationwide referendum on the issue 
of preserving the Soviet Union, Estonia decided to preempt 
the ballot with a referendum of its own on independence. The 



23 



Estonia, Latvia, and Lithuania: Country Studies 

March 3 Estonian poll showed 78 percent in favor of indepen- 
dence and indicated significant support for independence 
among Russian residents — as much as 30 percent. Most Esto- 
nians boycotted the Soviet referendum held two weeks later. 
With public opinion clearly favoring independence, Gor- 
bachev agreed to official talks with Estonia beginning on 
March 28. The talks continued through August and the Mos- 
cow coup, but no progress was made. Estonia refused to join 
negotiations for a new union treaty, while the Kremlin avoided 
any specifics on independence. The talks were further upset by 
several hit-and-run attacks on Estonia's border outposts during 
the summer of 1991. These were generally attributed to units 
of the Soviet Ministry of Internal Affairs Special Forces Detach- 
ment (Otryad militsii osobogo naznacheniya — OMON), com- 
monly known as the Black Berets, over which Gorbachev 
apparently had lost control. 

Independence Reclaimed, August 1991 -October 1992 

On the night of August 19, 1991, Estonia was caught up in 
the uncertainty generated by the attempted coup in Moscow. A 
column of Soviet light tanks and troop carriers had already 
started to move on Tallinn as the commander of Soviet forces 
in the Baltics announced his support of the coup. Fearing a 
total crackdown by the Soviet army, the Estonian parliament 
met in emergency session on August 20. At 11:00 P.M., the 
Supreme Council, as the legislature was now known, passed a 
final resolution declaring full independence and requesting de 
facto international recognition. Volunteers were mustered to 
defend key government buildings and communications cen- 
ters; there was no bloodshed, however. As Heinz Valk, an artist 
and a member of parliament, later declared, "The coup in Mos- 
cow [gave] us a chance comparable to that in 1918." 

Once the coup finally collapsed, Estonia resumed its efforts 
to gain international recognition and otherwise reestablish 
itself as an independent state. Iceland was the first to acknowl- 
edge Estonian independence, on August 22; Yeltsin's Russia 
was quick to follow, on August 24. The United States hesitated 
until September 2. The Soviet Union recognized Estonia on 
September 6. The process of state building also began soon 
after the coup. In contrast to Latvia and Lithuania, Estonia, in 
its August 20 independence declaration, took the additional 
step of convening a constitutional assembly immediately to 
draft a new basic law for the country. The assembly drew thirty 



24 



Estonia 



members each from the Supreme Council and the Congress of 
Estonia, thus defusing rivalries between the two organizations. 
In mid-October the assembly settled on a working draft focused 
on a generally parliamentary form of government. Delibera- 
tions then slowed as the country got caught up in debates over 
citizenship. 

In Estonia's fight to regain independence, the overall strat- 
egy of asserting the country's legal continuity as a state clearly 
had paid off. Yet, in terms of offering a path for the future, this 
strategy had many complications. One of these was the ques- 
tion of what to do with the 500,000 mostly Russian, Soviet-era 
immigrants living in Estonia. In 1990 the Congress of Estonia 
had been the first representative body to lay down the principle 
that because these people had settled in Estonia under Soviet 
rule, they were not automatically citizens of the legally restored 
Estonian state. Rather, under independence they would have to 
be "naturalized" on the basis of specific language and residency 
criteria. This position was also argued as a means of better inte- 
grating the mostly Russian noncitizen population, the majority 
of whom did not speak Estonian. In mid-1991, as the indepen- 
dence struggle seemed to languish, the Estonian government, 
led by Prime Minister Edgar Savisaar, showed signs of readiness 
to compromise on the citizenship issue in order to gain more 
local Russian support. However, after the failed August coup 
and the immediate onset of full independence, the Congress 
and other radical groups were emboldened to insist on the 
principle of restricted citizenship. Thus, the Supreme Council 
decided on November 11, 1991, to require the naturalization 
of all Soviet-era immigrants to Estonia while automatically 
renewing the citizenship of all prewar citizens and their 
descendants. In February 1992, the parliament set naturaliza- 
tion terms, which included a two-year residency requirement, 
the ability to speak conversational Estonian, and a one-year 
waiting period after applying. 

Although these terms were relatively mild, the implications 
in Estonia's particular situation remained less than clear. Most 
Soviet-era immigrants had already fulfilled the residency 
requirement, but at best only 20 percent were prepared to 
meet the language requirement. Most Russians living in Esto- 
nia had not bothered to learn the rudiments of the national 
language, forcing Estonians to speak Russian to them instead. 
It would take time for many to begin learning. In any case, the 
naturalization procedures would delay nationalization for at 



25 



Estonia, Latvia, and Lithuania: Country Studies 

least the one-year waiting period. This outcome had serious 
implications because the resident Russians would then be ineli- 
gible to vote in the September 1992 elections for a new parlia- 
ment. As the only consolation to noncitizens, the Constitu- 
tional Assembly later accorded them the right to vote in local 
elections under the terms of the new constitution. 

The citizenship issue generally heightened tensions between 
Estonians and Russians. The more nationalistic Estonian depu- 
ties in parliament began to accuse the moderate government 
of Savisaar of foot-dragging. In January 1992, in the midst of a 
severe economic crisis and problems securing heating oil, 
Savisaar asked parliament for emergency powers. When the 
vote on emergency powers was taken on January 16, Savisaar 
won, thanks only to the votes of several Russian deputies. This 
narrow margin revealed the extent of Savisaar's unpopularity 
among the Estonian deputies, and a week later he resigned. 
Savisaar's transportation minister, Tiit Vahi, was charged with 
forming a new government, which was billed as one of techno- 
crats and caretakers in advance of parliamentary elections in 
the fall. 

As Vahi formed his regime, several major issues remained 
outstanding. The new prime minister's first task was to oversee 
the passage of the naturalization requirements for citizenship, 
which occurred in late February. Then, the language and resi- 
dency requirements were put into effect. Thereafter, the draft 
constitution drawn up by the Constitutional Assembly neared 
completion and required approval by popular referendum. 
This referendum was set for June 28, 1992, with only citizens 
allowed to participate. Alongside the proposed constitution, a 
second question asked the people whether to allow the earliest 
applicants for citizenship to vote on an exceptional basis in the 
upcoming nationwide elections. Because these applicants num- 
bered just over 5,000, the gesture would be largely symbolic. 
However, a strong campaign by nationalist Estonian parties led 
to the defeat of the measure, 53 percent to 46 percent. The 
constitution was passed by a 91 percent majority. 

On June 20, one week before the referendum, the Vahi gov- 
ernment completed its third remaining task: currency reform. 
On that day, Estonian residents proudly cashed in their old, 
worn Russian rubles for crisp, new Estonian kroons (for value 
of the kroon — see Glossary). The kroon, pegged to the stable 
deutsche mark, would soon bring inflation tumbling down and 
serve as the basis for a new economy (see Economy, this ch.). 



26 




Typical rural landscape near Viljandi 
Industrial pollution on the northern coast 
Courtesy Priit Vesilind 



27 



Estonia, Latvia, and Lithuania: Country Studies 

With the constitution approved and a new state structure in 
place, the campaign began for Estonia's first post-Soviet elec- 
tions. The election of a new legislature, the Riigikogu, on Sep- 
tember 20 would mark the full restoration of the legal Republic 
of Estonia. On October 5, 1992, in its first session, the 
Riigikogu, which replaced the transitional Supreme Council, 
issued a declaration establishing its legal continuity with the 
prewar republic and declaring an official end to the transition 
to independence announced two-and-one-half years earlier. 

Physical Environment 

Geographic Features 

Estonia is a low, flat country covering 45,226 square kilome- 
ters. It is about the size of Vermont and New Hampshire com- 
bined. Estonia has a long, shallow coastline (1,393 kilometers) 
along the Baltic Sea, with 1,520 islands dotting the shore. The 
two largest islands are Saaremaa (literally, island land), at 2,673 
square kilometers, and Hiiumaa, at 989 square kilometers. The 
two islands are favorite Estonian vacation spots. The country's 
highest point, Suur Munamagi (Egg Mountain), is in the hilly 
southeast and reaches 318 meters above sea level. Estonia is 
covered by about 1.8 million hectares of forest. Arable land 
amounts to about 926,000 hectares. Meadows cover about 
252,000 hectares, ana* pastureland covers about 181,000 hec- 
tares. There are more than 1,400 natural and artificial lakes in 
Estonia. The largest of them, Lake Peipsi (3,555 square kilome- 
ters), forms much of the border between Estonia and Russia. 
Located in central Estonia, Vortsjarv is the second-largest lake 
(270 square kilometers). The Narva and Emajogi are among 
the most important of the country's many rivers. 

Estonia has a temperate climate, with four seasons of near- 
equal length. Average temperatures range from 16.3°C on the 
Baltic islands to 17.1°C inland in July, the warmest month, and 
from -3.5°C on the Baltic islands to -7.6°C inland in February, 
the coldest month. Precipitation averages 568 millimeters per 
year and is heaviest in late summer. 

Estonia's land border with Latvia runs 267 kilometers; the 
Russian border runs 290 kilometers. From 1920 to 1945, Esto- 
nia's border with Russia, set by the 1920 Tartu Peace Treaty, 
extended beyond the Narva River in the northeast and beyond 
the town of Pechory (Petseri) in the southeast (see fig. 2). This 
territory, amounting to some 2,300 square kilometers, was 



28 



Estonia 



incorporated into Russia by Stalin at the end of World War II. 
Estonia is now disputing that territorial loss (see Relations with 
Russia, this ch.). 

Environmental Issues 

One of the most burdensome legacies of the Soviet era is 
widespread environmental pollution. The worst offender in 
this regard was the Soviet army. Across military installations 
covering more than 80,000 hectares of Estonian territory, the 
army dumped hundreds of thousands of tons of jet fuel into 
the ground, improperly disposed of toxic chemicals, and dis- 
carded outdated explosives and weapons in coastal and inland 
waters. In the 1990s, during the army's withdrawal from Esto- 
nia, extensive damage was done to discarded buildings and 
equipment. In October 1993, the Estonian Ministry of Environ- 
ment issued a preliminary report summing up part of the deg- 
radation it had surveyed thus far. The report described the 
worst damage as having been done to Estonia's topsoil and 
underground water supply by the systematic dumping of jet 
fuel at six Soviet army air bases. At the air base near Tapa, site 
of the worst damage, officials estimated that six square kilome- 
ters of land were covered by a layer of fuel; eleven square kilo- 
meters of underground water were said to be contaminated. 
The water in the surrounding area was undrinkable. With Dan- 
ish help, Estonian crews began cleaning up the site, although 
they estimated the likely cost to be as much as EKR4 million. 
The Ministry of Environment assigned a monetary cost of 
more than EKR10 billion to the damage to the country's top- 
soil and water supply. However, the ministry was able to allocate 
only EKR5 million in 1993 for cleanup operations. 

In a 1992 government report to the United Nations Confer- 
ence on the Environment and Development, Estonia detailed 
other major environmental concerns. For instance, for several 
consecutive years Estonia had led the world in the production 
of sulfur dioxide per capita. Nearly 75 percent of Estonia's air 
pollution was reported to come from two oil shale-based ther- 
mal power stations operating near Narva. The mining of oil 
shale in northeastern Estonia also left gigantic mounds of lime- 
stone dotting the region. Near the town of Sillamae, site of a 
former uranium enrichment plant, about 1,200 tons of ura- 
nium and about 750 tons of thorium had been dumped into 
the Gulf of Finland. This was said to have caused severe health 
problems among area residents. In the coastal town of Paldiski, 



29 



Estonia, Latvia, and Lithuania: Country Studies 

the removal of waste left by Soviet army nuclear reactors was 
also a major concern. The combined cost of environmental 
cleanup at both towns was put at more than EKR3.5 billion. 

Society 
Population 

According to 1989 census figures, Estonia had a population 
of 1,565,662 (see table 2, Appendix). By 1994 this number had 
dropped to an estimated 1,506,927 as a result of negative natu- 
ral growth rates and net out-migration beginning in 1990. 
Females outnumbered males by some 100,000 in 1991 (see fig. 
4). Seventy percent of the population was urban. The birth rate 
in 1993 was 10.0 per 1,000 population, and the death rate was 
14.0 per 1,000. 

Tallinn, the capital, is the largest city, with about 479,000 
inhabitants in 1989. Tartu, the second most populous city, had 
about 113,000 residents in the same year, and Narva, on the 
Russian border, had 81,000 (see table 3, Appendix). Since the 
late 1980s, many place-names have had their pre-Soviet names 
restored. These include the Saaremaa town of Kuressaare (for- 
merly Kingissepa) and some 250 streets throughtout the coun- 
try. 

In 1934 Estonia had a population of 1,126,413. War losses 
and Soviet deportations brought that figure down to an esti- 
mated 850,000 by 1945. During the Soviet era, the population 
grew steadily, fueled largely by in-migration from other areas of 
the Soviet Union (see table 4, Appendix). During the 1950s 
and 1960s, net in-migration accounted for more than 60 per- 
cent of the total population growth. In recent years, net migra- 
tion has reversed, with some 84,000 people, mostly Russians, 
having left between 1989 and 1993. In the mid-1990s, these 
trends were continuing, though more slowly. Since 1992 Esto- 
nia has been offering financial assistance to people wishing to 
resettle in Russia; in October 1993, it signed a treaty with Russia 
regulating repatriation and resettlement. According to public 
opinion polls conducted in 1993 and 1994, however, the vast 
majority of local Russians were not inclined to leave Estonia. 

The reverse flow of migration is thought to have contributed 
in the early 1990s to a slight rise in the Estonian proportion of 
the population. In 1989 Estonians constituted only 61.5 per- 
cent of the population, while Russians made up 30.3 percent, 
Ukrainians 3.1 percent, Belorussians 1.7 percent, and Finns 1.1 



30 



Estonia 



percent; Jews, Tatars, Germans, Latvians, and Poles constituted 
the remaining 2.3 percent. This was in sharp contrast to 1934, 
when Estonians represented 88.2 percent of the population 
and Russians only 8.2 percent. This demographic shift was a 
major concern for Estonians, who feared losing control of their 
own country. Another worrisome statistic for Estonians was 
their disproportionately small share of the yearly natural popu- 
lation growth (births minus deaths) until 1990 and their large 
share of the population's decrease in 1991 (see table 5, Appen- 
dix). Although Estonians dominate in the countryside, the 
Russian population in Estonia is nearly 90 percent urban, living 
mainly in Tallinn and in the northeastern industrial towns of 
Kohtla-Jarve, Sillamae, and Narva. Tallinn is about 47 percent 
Estonian. Kohtla-Jarve is only about 21 percent Estonian, Sil- 
lamae 5 to 6 percent, and Narva 4 percent. 

Health 

In the mid-1980s, the average life expectancy in Estonia 
peaked at about sixty-six years for males and seventy-five years 
for females. Thereafter, these figures declined somewhat, espe- 
cially for males, most likely because of deteriorating living stan- 
dards. In 1994 overall life expectancy was estimated to be 70.0 
years (65.0 years for males and 75.2 years for females). Infant 
mortality was about 19.1 deaths per 1,000 live births, according 
to a 1994 estimate. Fertility rates dropped from an estimated 
2.3 children born per woman in 1988 to about 2.0 in 1994. 
Abortion remained the main form of birth control, more so 
among Russians than Estonians. There were 24,981 abortions 
in 1992 (1,389 per 1,000 live births), although that figure was 
down from about 36,000 a decade earlier. Most women who 
have abortions are married. Nearly half of all marriages end in 
divorce. In recent years, a greater number of people have 
begun living together instead of marrying. Such couples 
account for 17 percent of all births in the country. 

The primary cause of death is cardiovascular diseases, 
accounting for about 64 percent of all deaths in the mid-1990s. 
Cancer and accidents account for a large share as well. Esto- 
nia's suicide rate over the years has reflected the country's 
sociopolitical condition. In the mid-1970s, during the politi- 
cally stagnant Brezhnev years, there were about 530 suicides 
per year. In 1990, after Estonia's political reawakening, suicides 
dropped to 425. In 1992, as economic conditions worsened, 
suicides climbed again, to 498. In November 1993, twenty-nine 



31 



Estonia, Latvia, and Lithuania: Country Studies 



AGE-GROUP 




0-4 i— — — zz i : 



864202468 

POPULATION IN TENS OF THOUSANDS 
^■■^^^■■■■■■■■■■■■■■■■■■■■■■■■■HHHI 

Source: Based on information from Marje Joeste, Ulo Kaevats, and Harry Oiglane, eds., 
Eesti A & 6, Tallinn, 1993, 104. 

Figure 4. Population of Estonia by Age and Gender, 1991 

cases of acquired immune deficiency syndrome (AIDS) were 
reported in Estonia, with two deaths having resulted from 
AIDS-related illnesses. 

The state-run health care system inherited from the Soviet 
regime was being decentralized in the early 1990s and had yet 
to meet Western standards. In 1992 the number of physicians, 
equivalent to thirty-two per 10,000 inhabitants, was relatively 
high, but there was a shortage of nurses and other auxiliary 
medical staff. Hospital beds numbered ninety-two per 10,000 
inhabitants, down from 121 in 1990. Although the cost of med- 
icines increased, new imports from the West eased some of the 
chronic shortages of the Soviet era. But overall, shortages of 
basic medical supplies, including disposable needles, anesthet- 
ics, and antibiotics, remained a serious problem. 



32 



Estonia 



Welfare 

In 1990 and 1991, Estonia began taking over more of the 
administration of its social welfare system from the central 
Soviet authorities. The government instituted its own system of 
payments, for example, to compensate the population for the 
removal of state subsidies and an increase in food prices. In 
April 1991, the republic passed its own pension law, the imple- 
mentation of which was upset by inflation, although later the 
situation improved with the introduction of a new currency. 
Still, with some 307,000 pensioners and a rapidly aging popula- 
tion, pensions accounted for a large share of the country's 
social fund (see Recent Economic Developments, this ch.). In 
response, the government began gradually raising the retire- 
ment age from fifty-five for women and sixty for men to sixty 
for women and sixty-five for men. In January 1993, more than 
1,000 angry retirees staged a protest in front of Toompea Cas- 
tle to demand higher pensions. At EKR260 a month, pensions 
were so low that many people complained that they could 
barely pay their rent and utility bills. 

Other welfare benefits provided by the state included finan- 
cial support for invalids, low-income families, and families hav- 
ing three or more children. The state also provided institu- 
tional care for elderly people and orphans. 

Education System 

With a half-century of Soviet rule behind it, independent 
Estonia began a process of thorough educational reform. In 
addition to a restructuring of curricula, the government began 
a reorganization of the secondary school system with the goal 
of increasing specialization among the country's high schools. 
In 1993 there were some 215,000 elementary and secondary 
school students in 724 schools across Estonia. About 142,000 
students were enrolled in Estonian-language schools and about 
70,000 in Russian-language schools, mainly in Tallinn and 
northeastern Estonia. In addition, there were individual 
schools teaching in other minority languages, including 
Hebrew, Swedish, and Ukrainian. Estonian-language schools 
offer twelve years of education — nine elementary and three 
secondary. Education in Russian-language schools lasts eleven 
years. Under a 1993 law, education was made compulsory up to 
the ninth grade. Estonia's vocational education network is also 



33 



Estonia, Latvia, and Lithuania: Country Studies 

extensive, with seventy-seven schools across the country and 
about 26,000 students in 1993. Literacy is nearly universal. 

Estonia's system of higher education centers on six universi- 
ties. Tartu University, founded in 1632, is the country's largest, 
with about 7,600 students in 1993. The Tallinn Technical Uni- 
versity had about 6,800 full-time students in 1993, and the 
Tallinn Pedagogical University had about 3,150. The Estonian 
Agricultural University in Tartu had about 2,800 students, and 
the Tallinn Art University and the Estonian Academy of Music 
each enrolled about 500. 

Higher education was restructured in the early 1990s into a 
four-year system after the five-year Soviet system was dropped. 
A new degree structure comparable to the Western one of bac- 
calaureate, master's, and doctoral degrees was established. 
Soviet ideological subjects such as "scientific communism" were 
abandoned soon after the independence movement began in 
1988. With the help of exchange programs and guest lecturers 
from the West, new programs were begun in economics, busi- 
ness, foreign languages, religion, political science, and sociol- 
ogy- 
Religion 

The dominant religion in Estonia is Evangelical Lutheran- 
ism. Estonians were Christianized by the Teutonic Knights in 
the thirteenth century. During the Reformation, Lutheranism 
spread, and the church was officially established in Estonia in 
1686. Still, Estonians generally tend not to be very religious, 
because religion through the nineteenth century was associ- 
ated with German feudal rule. In 1992 there were 153 Luthe- 
ran congregations in Estonia with an estimated 200,000 
members. Active members totaled about 70,000. 

Orthodox Christianity is the second largest faith, with eighty 
congregations and about 15,000 members in 1992. Forty-three 
Orthodox congregations are Estonian, twenty-five are Russian, 
and twelve are mixed. There are eleven congregations of Old 
Believers (see Glossary) and a convent in Kuremae, in north- 
eastern Estonia. After independence, ethnic divisions among 
Orthodox Christians resurfaced over the question of their alle- 
giance to Moscow. Many Estonian Orthodox Church leaders 
favored greater autonomy from Moscow or total allegiance to 
the Ecumenical Patriarchate of Constantinople, the situation 
that existed during Estonia's first period of independence. In 
1992 the Estonian Orthodox Church, despite local Russian 



34 



Old city gate with modern hotel in background, Tallinn 

Courtesy David Walker 
'Kali, " a nonalcoholic beverage made from rye bread, dispensed 

in the southern town ofParnu 
Courtesy Priit Vesilind 



35 



Estonia, Latvia, and Lithuania: Country Studies 

objections, requested autonomy from Moscow. The issue was a 
delicate one for Russian Orthodox patriarch Aleksiy II, who 
had been born in Estonia and had served there as a metropoli- 
tan. However, in April 1993 he agreed to grant the Estonian 
Orthodox Church autonomy. 

Among other religions in Estonia in the early 1990s there 
were eighty-three Baptist congregations with about 6,000 adult 
members, as well as about fifteen Methodist and several Sev- 
enth-Day Adventist congregations. Estonia's small Roman Cath- 
olic community was visited by Pope John Paul II during a tour 
of the Baltic states in September 1993, and the Dalai Lama 
came to Estonia soon after independence, in October 1991. 
The Jewish community has a synagogue in Tallinn. 

Language and Culture 

The Estonian language belongs to the Finno-Ugric family of 
languages, closely related to Finnish and more distantly related 
to Hungarian. It is among the most difficult languages in 
Europe, with fourteen cases for the declension of nouns and 
complicated rules for their use. There are no articles, however, 
nor any grammatical gender in Estonian. Indeed, the same 
word is used for both "he" and "she": tema. Over the years, the 
language has been standardized, but many dialects and accents 
remain, especially on the islands. Most of the foreign words 
used by Estonians come from German. Russian, Finnish, and 
English also have influenced Estonian, especially in the forma- 
tion of slang. 

Estonian culture developed in earnest during the nine- 
teenth-century period of national awakening. Elements of Esto- 
nian peasant culture, such as songs and folktales, were brought 
together by the country's first cultural elite after 1850. Between 
1857 and 1861, Friedrich Reinhold Kreutzwald compiled and 
published the Estonian national epic, Kalevipoeg (Son of Kalev), 
which was based on various folklore themes. Written in verse, 
the epic tells the story of Kalevipoeg, the mythical ancient ruler 
of Estonia. Another achievement of this period was the estab- 
lishment of Estonia's first regularly published Estonian-lan- 
guage newspaper, Perno Postimees, originally published in Parnu 
by Johann Voldemar Jannsen in 1857. In 1878 Carl Robert 
Jakobson established the newspaper Sakala, which would soon 
become a major promoter of the cultural renaissance. Jakob 
Hurt, a schoolteacher and Lutheran minister, organized a col- 



36 



Estonia 



lection of folk songs in the 1880s and gave several speeches 
extolling the value of Estonian culture. 

The national literature had an earlier beginning, in the 
1810s, with the patriotic poetry of Kristjanjaak Peterson. In the 
second half of the nineteenth century, romanticism and love of 
country found equal expression in the poetry of Lydia Koidula, 
Estonia's first woman poet and a key figure of the cultural awak- 
ening. The first Estonian song festival was organized in 1869 in 
Tartu, attracting some 800 participants and about 4,000 specta- 
tors. This event would become a major tradition in Estonian 
cultural life and was held roughly every five years. At the end of 
the nineteenth century, Estonian theater also got its begin- 
nings in Tartu with the formation of the Vanemuine theater 
group. 

During the first independence period, Estonian culture 
thrived. During 1926-33 writer Anton Hansen Tammsaare pub- 
lished his five-volume epic novel, Todeja Oigus (Truth and Jus- 
tice), which covered the period 1870-1930. Lyrical poetry grew 
with the works of Marie Under, Henrik Visnapuu, and Betti 
Alver. In 1919 the Pallas art school was founded in Tartu, giving 
rise and expression to several new artistic currents. Architec- 
ture became a new mode of expression for Estonians as the 
first architects were educated in Tallinn. Their works came to 
include the parliament building on Toompea Hill and several 
functionalist buildings in the resort town of Parnu. The Esto- 
nian Drama Theater was established in 1926, complementing 
the already existing Estonia Theater, which featured operettas 
and ballet. By 1940 Estonia had eleven professional or semipro- 
fessional theaters. 

The return of the Red Army in 1944 after the German occu- 
pation caused much of Estonia's cultural elite to flee the coun- 
try. Many writers and poets settled in Sweden, where they 
continued to issue works through their own publishing cooper- 
ative. Under Stalin, Estonian culture was subordinated to the 
propagandistic needs of the regime. In 1950, as the Estonian 
Communist Party was being purged, so too was Estonian cul- 
ture. Many writers and artists were accused of "formalism" 
(adherence to bourgeois standards) or nationalism and were 
dismissed or deported. It was only in the 1960s, during the 
thaw under Khrushchev, that Estonian culture regained 
vibrancy, the result of increased foreign contacts and the 
arrival on the scene of a new generation of writers, artists, com- 
posers, and poets. The last category included Paul-Eerik 



37 



Estonia, Latvia, and Lithuania: Country Studies 

Rummo (appointed minister of culture in 1992), Jaan Kaplin- 
ski (elected a member of parliament in 1992), and Hando Run- 
nel. Novelist Jaan Kross made his debut during this period as a 
writer of historical works; his 1978 book, The Czar's Madman, 
was published in English in 1993 to critical acclaim. Graphic 
art became popular in Estonia during the 1960s, as did abstrac- 
tionism among painters. The Estonian music scene saw the 
coming of age of Arvo Part, who would emigrate in 1980 to 
West Germany; Veljo Tormis, a composer drawing on themes 
from Finno-Ugric folk music; and Neeme Jarvi, who emigrated 
in 1980 and later became director of the Detroit Symphony 
Orchestra. Song festivals still were held continuously, often pro- 
viding a popular outlet for national feeling. In the place of the 
banned national anthem, the song My Fatherland Is My Love, 
based on a poem by Lydia Koidula and music by composer and 
conductor Gustav Ernesaks, became Estonians' de facto an- 
them. 

During the late 1970s and early 1980s, Estonian culture 
again felt some of the cold drafts of official control, but by 1986 
the influence of glasnost began to stir cultural activity anew, this 
time far into the realm of politics. One of the first groups to 
mobilize in 1987 was the Estonian Heritage Society, which led 
volunteer projects to restore many of Estonia's cultural land- 
marks. At a 1986 writers' conference, the first complaints were 
publicly aired about censorship and Russification. In the main 
literary publications — Sirp ja Vasar, Vikerkaar, and Looming — an 
unprecedented number of articles began to appear dealing 
with hitherto banned topics. In April 1988, during a two-day 
public forum, nearly fifty of Estonia's most prominent cultural 
figures met to voice their concerns about the state of Estonia's 
culture, language, and people. Open criticism was leveled 
against the old-guard party leadership of Karl Vaino, and 
demands were made for real political reform. The forum was 
an awe-inspiring event for the hundreds of thousands of Esto- 
nians who listened on radio; yet it was only a prelude to the 
"singing revolution" that would follow that summer. 

During the next several years, many of Estonia's artists, 
poets, and writers would become involved in politics. Thirteen 
cultural figures were elected to the Supreme Soviet in 1990, 
nearly twenty to the Riigikogu, the new legislature, in 1992. 
Culture suffered, however, because of economic decline. Paper 
shortages in 1990 and 1991 limited the number of books and 
literary journals that could be published. Art supplies, in high 



38 



Estonia 



demand, often were available only in exchange for hard cur- 
rency. Still, foreign contacts opened up completely with oppor- 
tunities to view new creative works and to spread Estonian 
culture abroad. With independence again in hand, Estonia 
could look forward to another era of free cultural development 
in a common European home. 

Economy 

Estonia's transition to a free-market economy in the early 
1990s reflected the difficulties of building an independent 
economy from the ruins of one that hitherto had been devel- 
oped for a single market, that of the Soviet Union. The cre- 
ation of new economic institutions such as a separate monetary 
system, new regulatory agencies, and new development strate- 
gies had to keep pace with the decline of the old economy and 
its institutions. Real gross domestic product (GDP — see Glos- 
sary) dropped continuously in the early 1990s (see table 6, 
Appendix). Yet, among the former Soviet republics, in roughly 
four years of far-reaching market reforms Estonia became a 
model of economic transformation. The right-of-center gov- 
ernment of Mart Laar, which took office in 1992, maintained a 
promarket stance despite criticism from opposition parties and 
agricultural interests, which were most vulnerable to foreign 
competition. After the introduction of the kroon in June 1992, 
inflation fell rapidly to an average of less than 3 percent per 
month in 1993. Consumer goods were again in abundant sup- 
ply. Foreign trade grew, although in 1993 the trade balance 
began to show deficits. Under a program of privatization, 80 
percent of the country's state-owned small businesses were sold 
off, and three rounds of large-scale privatization with foreign 
participation resulted in the acquisition of thirty major enter- 
prises. By January 1995, after several more rounds of privatiza- 
tion, only twenty large enterprises had yet to be privatized. 
Official unemployment dropped to 1.4 percent in November 
1994, but real unemployment may have been as high as 10 per- 
cent. The squeeze on the economy and the state budget inten- 
sified as many large, privatized firms were downsized and the 
transition neared the decisive stage of open competition. 

Economic Reform History 

Estonia began its reform process in 1987 with the develop- 
ment of a plan for economic autonomy within the Soviet 



39 



Estonia, Latvia, and Lithuania: Country Studies 

Union. Drawing on examples from both China and Hungary, 
the radical proposal called for an end to central economic con- 
trol over Estonia, a separate tax system, and the adoption of a 
convertible ruble. Until then, it had been said that as much as 
90 percent of the Estonian economy was controlled from Mos- 
cow; very little was left for the Estonians to decide for them- 
selves. The decline in living standards beginning in the early 
1980s and the "years of stagnation" were viewed as direct conse- 
quences of this overcentralization. With Gorbachev calling for 
a "restructuring" (or perestroika) of the economy, the Estonian 
proposal was meant to respond to and test this new call for 
change. The idea was popular among Estonians, not least of all 
because of the plan's name, Isemajandav Eesti, whose acronym, 
IME, also means "miracle" in Estonian. 

Despite initial resistance from the old-guard Estonian Com- 
munist Party leadership, IME became official policy soon after 
the appointment of native-born Vaino Valjas as first secretary of 
the party in June 1988. Teams of economists were put to work 
mapping out the laws and decrees that would enable the plan 
to begin by January 1, 1990. Much of this work would improve 
Estonians' knowledge of reform economics by the time more 
radical measures proved necessary. In May 1989, the Estonian 
Supreme Soviet approved the plan by an overwhelming major- 
ity, sending it on to the Supreme Soviet in Moscow. Kremlin 
bureaucrats, however, sought to water down the scheme, inject- 
ing contradictory clauses that would make the plan unwork- 
able. While the final law passed by the Soviet parliament 
accorded economic autonomy to Estonia, along with Latvia 
and Lithuania, it also stipulated that all reform measures be in 
accord with central Soviet laws. 

In the following months, as the popular mood in Estonia 
shifted toward full independence, it became clear that the IME 
plan, too, would get nowhere within the increasingly outdated 
Soviet system. Still, many of the details and general impetus of 
IME proved very useful for economic reform down the road. In 
December 1989, the Estonian Supreme Soviet voted to create a 
central bank, the Bank of Estonia, for the republic as part of 
the plan for an eventual Estonian currency. Price-reform poli- 
cies were in full force by October 1990, and an independent 
law on foreign trade was adopted. Prime Minister Edgar 
Savisaar sought to broaden Estonia's economic contacts with 
other Soviet republics, organizing several economic summits in 
Tallinn with Central Asian and Caucasian leaders. A new tax 



40 



Estonia 



system was put in place in Estonia, replacing the state budget's 
dependence on enterprise turnover taxes and phasing in 
income and sales taxes. In short, economic reform simply was 
carried out without regard to the Kremlin. 

By August 1991, with Estonia's leap to full independence, 
the economy was beginning to feel the pain of both market 
reform and collapsing ties to the Soviet Union. Gasoline short- 
ages had been endemic since 1990, and many enterprises were 
forced to cut production because of a lack of raw materials pre- 
viously imported from other Soviet republics. Lax Soviet mone- 
tary policy also fueled Estonian inflation, undermining reform 
efforts as long as the new country remained in the Russian 
ruble zone. An unprecedented fuel and food shortage in Janu- 
ary 1992 prompted Prime Minister Savisaar to ask parliament 
for emergency powers to deal with the crisis. Deputies in parlia- 
ment, however, had lost confidence in Savisaar, and in the 
ensuing political crisis he was forced to resign. Savisaar was 
replaced by his transportation minister, Tiit Vahi. 

A temporary fuel loan from Finland helped stabilize the situ- 
ation, but the need to hasten the introduction of Estonia's own 
currency became apparent. Other economic reforms such as 
privatization and foreign trade were also being held up by the 
country's dependence on the Russian ruble. 

On June 20, 1992, against earlier objections from the Inter- 
national Monetary Fund (IMF — see Glossary), Estonia intro- 
duced its new currency, the kroon. With only US$120 million 
in gold reserves and no internationally backed stabilization 
fund, Bank of Estonia president Siim Kallas said the country 
could wait no longer. At 800 exchange points across the coun- 
try, residents were allowed to exchange up to 1,500 rubles at a 
rate of ten rubles to one kroon. Excess cash was exchanged at a 
rate of fifty to one. Bank accounts were converted in full at ten 
to one. By the end of the three-day transition period, the move 
was declared a success, with only minor glitches reported. For 
stability, the kroon was pegged by special agreement to the 
deutsche mark (DM) at EKR8 = DM1. This would make the 
kroon worth about 7.7 United States cents, or EKR13 = US$1. 
The kroon would be the only Baltic currency to be officially 
pegged to any outside value. 



41 



Estonia, Latvia, and Lithuania: Country Studies 

Recent Economic Developments 

Monetary and Fiscal Policy 

The new Estonian currency became the foundation for ratio- 
nal development of the economy. Money began to have clear 
value; the currency supply could be controlled from Tallinn, 
not Moscow; and long-term investment decisions could be 
made with greater confidence by both the state and private 
enterprise. The president of the central bank, Siim Kallas, 
made "hard money" the benchmark of his policy. In return, the 
bank saw its reserves grow rapidly, to US$184 million by the 
end of 1992 and US$365 million by December 1993. The cen- 
tral bank was independent of the government but subordinate 
to the parliament. In addition to its president, the bank was 
managed by a board of directors, whose chairman was also 
appointed by parliament. 

Although the initial success of the kroon was gratifying, 
many fiscal challenges remained that threatened to upset mon- 
etary policy in the future. Among these was a high enterprise 
tax debt to the state. In December 1992, this debt, mostly 
unpaid revenue taxes from large state firms, amounted to 
about EKR565 million. A year later, this sum had fallen to 
roughly EKR400 million, but the possibility that the state might 
need to use its own funds to bail out these ailing firms 
remained. Another danger to monetary stability was posed by 
the possible collapse of several private banks in Estonia. In 
November 1992, the Bank of Estonia ordered the shutdown of 
three private banks because of insolvency. One of these was the 
Tartu Commercial Bank, which in 1988 had become the first 
private bank to be founded in the Soviet Union. Bad loans, 
increased competition, and poor management were expected 
to force other bank closures, with which the state would have to 
deal. 

Following the enactment of reform laws during 1989-90, the 
state budget in Estonia was broken into three parts: the central 
government budget, local government budgets, and nine 
extrabudgetary funds. In 1993 (the first year for which figures 
are provided entirely in kroons), the central state budget ran a 
surplus of EKR216 million on total revenues of roughly EKR4.2 
billion (US$323 million). This surplus, however, was immedi- 
ately spent in a secondary budget drawn up in October. The 
central budget included the financing of government opera- 
tions (ministries, schools, police, cultural subsidies, and so 



42 




Farm laborers in northern Estonia 
Small Estonian farmstead 
Courtesy Priit Vesilind 



43 



Estonia, Latvia, and Lithuania: Country Studies 

forth) as well as roughly EKR500 million in aid to cities and 
towns. About half of the revenue for the central budget came 
from an 18 percent value-added tax (VAT — see Glossary) on 
most goods and services. Another 35 percent came from per- 
sonal income and business taxes. Social welfare taxes on 
employer payrolls went directly into the state's extrabudgetary 
social welfare and health insurance funds, which amounted to 
slightly more than EKR2 billion. In all, general government 
taxes (including local taxes) in 1991 amounted to about 47.7 
percent of GDP. Although successive governments pledged to 
reduce the overall tax burden, the transition was slow. In 1994 
the previous three-tiered progressive tax scale was replaced 
with an across-the-board income tax rate of 26 percent. Esto- 
nia's central budget in 1995 was expected to total EKR8.8 bil- 
lion, exceeding the 1994 budget and its supplements by 
EKR2.3 billion, mainly because of additional expenditures on 
social welfare, the civil service, the police, and the border 
guard. It was to be a balanced budget, nonetheless, for the sec- 
ond consecutive year. Various forms of taxation, including the 
income tax, an 18 percent VAT, and a corporate tax were to 
provide most of the revenue. 

Wages and Prices 

After the beginning of economic reform in Estonia, real 
wages dropped precipitously. From the fourth quarter of 1989, 
when the first price rises began, to the third quarter of 1991, 
when Estonia became independent, real wages fell by more 
than half. Food prices rose an estimated sevenfold as state sub- 
sidies were eliminated and the population received only partial 
government compensation for the higher prices. Fuel prices 
and apartment rents also increased. Inflation soared even 
more after independence as trade with Russia broke down even 
though Estonia remained in the ruble zone. In January 1992 
alone, the cost-of-living index rose 88 percent, and in February 
it rose another 74 percent. The average rate for the year was 
1,000 percent according to some estimates. Nominal monthly 
wages skyrocketed to keep pace, rising from 648 rubles in May 
1992 to 3,850 rubles by May 1993. 

The introduction of the kroon in June 1992 did much to sta- 
bilize wages and inflation. In 1993 increases in the consumer 
price index averaged about 3.0 percent per month; in 1994 
they averaged 3.5 percent per month. The average monthly 
wage settled around EKR500 in August 1992. Thereafter, it 



44 



Estonia 



began a steady climb, reaching roughly EKR1,200 by the end of 
1993. Yet, according to Arvo Kuddo, an official of the Bank of 
Estonia, real wages in mid-1993 still amounted to only 95 per- 
cent of their June 1992 levels and barely 50 percent of their lev- 
els from early 1991. In the meantime, wage differentials 
between the highest- and lowest-paying jobs grew markedly, 
from 3.4 times to ten times. According to the Estonian State 
Statistics Board, in mid-1993 the top 10 percent of wage earn- 
ers received 32.9 percent of all income, while the bottom 10 
percent received only 2.1 percent. Residents of Tallinn had the 
highest average monthly wage, some 20 percent above the 
national average. Personal savings also declined during this 
period. In December 1992, 41 percent of survey respondents 
said they had no significant savings at all. In 1993 some 17 per- 
cent said they were behind in paying their utility bills for lack 
of money. 

Employment 

The complexion of the Estonian labor market changed rap- 
idly in the early 1990s in the wake of property reform and the 
growth of private enterprise. In 1990 some 95 percent of the 
labor force was employed in state-owned enterprises or on col- 
lective farms. Only 4.3 percent worked in private cooperatives 
or on private farms. In 1993 a public opinion survey indicated 
that less than half of the respondents now received their main 
income from a state enterprise. As privatization continued and 
the privately owned share of production increased, the share of 
state employment was expected to drop even more. Industry 
(in both the public and the private sectors) employed about 33 
percent of workers in 1990; agriculture, 12 percent; education 
and cultural activities, 10 percent; construction, 10 percent; 
and trade and catering, 9 percent. The remainder of the labor 
force engaged in a variety of other activities in the services sec- 
tor (see table 7, Appendix). 

As of December 1, 1993, Estonia's official unemployment 
rate was still very low, 1.7 percent, or 14,682 people. This figure 
represented the proportion of working-age people officially 
registered as unemployed with the government's Employment 
Board and hence receiving unemployment benefits. During 
the second half of 1993, unemployment had in fact steadily 
declined from a high of 22,699 in May. In addition, the num- 
ber of people on unpaid or partially paid leave declined during 
the first half of the year. By contrast, however, more people 



45 



Estonia, Latvia, and Lithuania: Country Studies 

were reported working part-time, most often with their full- 
time workweek having been reduced to three or four days. 
These people were not included in the official figure. The 
highest official unemployment rates in December 1993 were in 
the towns of the southeast (Voru, 5.3 percent; Polva, 4.8 per- 
cent) and the northeast (Narva, 4.4 percent). Tallinn posted 
the lowest unemployment rate (0.2 percent), with just 594 reg- 
istered jobless people. In 1994 official unemployment peaked 
at 2.3 percent in April, then fell steadily to a rate of 1.4 percent 
in November, the lowest rate among the Baltic states. 

The official unemployment figures, however, did not tell the 
whole story. The unemployment rate was based on the work- 
ing-age population (about 880,000 people), not the smaller 
number of active persons in the population (about 795,000). 
In addition, the figure did not include unregistered jobless 
people. In general, the low level of unemployment benefits 
also discouraged many people from even registering as unem- 
ployed. In October 1992, unemployment benefits in Estonia 
were reduced from 80 percent to 60 percent of the minimum 
monthly wage. Benefits were paid for 180 days with the possibil- 
ity of a ninety-day renewal. In 1993 the government allocated 
EKR90 million for an expected 40,000 unemployed but ended 
up disbursing only EKR30 million because of the low number 
of registered jobless people. Still, in the final quarter of 1993, 
the Economist Intelligence Unit estimated that the real level of 
unemployment was as high as 10 to 12 percent. 

Foreign Trade 

An integral part of Estonia's transition to a market economy 
during the early 1990s involved reorienting foreign trade to the 
West and attracting foreign investment to upgrade the coun- 
try's industry and commerce. In 1990 only 5 percent of Esto- 
nia's foreign trade was with the developed West, and of this, 
only 21 percent represented exports. About 87 percent of Esto- 
nia's trade was with the Soviet Union, and of that, 61 percent 
was with Russia. In 1991 trade with Western and other foreign 
countries fell further as available hard currency for imports 
dried up and as many producers of Estonian exports had to cut 
output because of a lack of raw materials. Although trade with 
Russia struggled on during the first half of 1991, trade relations 
broke down after independence was attained in August. New 
agreements were signed in December 1991, but precise licens- 
ing procedures and bilateral trade quotas took several more 



46 



Women laborers in Viljandi 
Ethnic Russians selling produce at Tallinn's central market 

Courtesy Priit Vesilind 



47 



Estonia, Latvia, and Lithuania: Country Studies 

months to work out. This delayed shipments of fuel and raw 
materials to Estonia, causing a severe economic crisis. 

The introduction of the Estonian kroon in June 1992 proved 
decisive in stabilizing foreign trade. By the third quarter of 
1992, Estonia experienced strong growth in foreign trade, fin- 
ishing the year with an EKR136 million surplus. The total vol- 
ume of trade amounted to nearly EKR11 billion, two-thirds of 
that coming during the second half of 1992. Moreover, by the 
end of the year, the very structure of Estonia's foreign trade 
had begun to change. European countries accounted for 56 
percent of Estonia's trade in 1992. While 28.4 percent of Esto- 
nia's imports continued to be from Russia, 22.6 percent now 
came from Finland. In 1993 Finland surpassed Russia as a 
source of Estonia's imports, 27.9 percent to 17.2 percent. The 
two countries were roughly equal as a destination for Estonian 
goods, both accounting for just above 20 percent in 1992 and 
1993 (see table 8, Appendix). Textiles constituted Estonia's 
leading trade article in 1992, accounting for 14 percent of 
exports. Among imports, Estonia primarily continued to 
receive mineral products (27.2 percent) and machinery and 
equipment (18.3 percent) (see table 9, Appendix). 

In 1993 Estonia ran a trade deficit estimated at US$135 mil- 
lion. The trade balance deteriorated partly because of the 
strength of the kroon and partly because of a growing need for 
automobiles, agricultural products, and other essential goods. 
There was a 131 percent increase in imports from 1992 to 1993, 
compared with a 91.8 percent increase in exports. This imbal- 
ance was offset by a strong increase in services, leaving the 
country's current account in the black at EKR493 million. The 
trade deficit, however, continued to swell, reaching an esti- 
mated US$389 million in 1994. 

Foreign Investment and Loans 

Foreign investment in Estonia began during 1987-88 with 
the creation of several dozen joint ventures under the Soviet 
Union's early reform strategy. The number of joint ventures in 
Estonia grew steadily after April 1990, when Estonian authori- 
ties began registering joint ventures themselves. By January 
1991, 232 joint ventures had been registered in Estonia; by 
October 1991, there were 313. Finland led in the number of 
joint ventures (159), but Sweden accounted for the most for- 
eign capital in Estonia (35 percent). In mid-1990 foreign 
investment also started coming into Estonia via joint-stock com- 



48 



Woman serving sour rye bread 
at Lahemaa National Park 



Boatman in Viljandi 
Courtesy Priit Vesilind 



cabin on the northern shore 
Courtesy Priit Vesilind 



panies — a more flexible form of ownership for both foreign 
investors and local capital. Joint-stock companies soon sur- 
passed joint ventures as the prime attraction for foreign capital, 
totaling 803 by October 1991. In fact, many joint ventures later 
were converted into joint-stock companies. In September 1991, 
Estonia passed a new foreign investment law offering tax 
breaks (new ventures were granted a two-year tax exemption) 
and import-export incentives to foreign investors. This legisla- 
tion stimulated further activity. In 1993 foreign investors were 
also given the right to buy land, but only through the purchase 
of privatized state enterprises. Non-Estonians could not own 
more than 50 percent of the equity in joint ventures without 
government permission. 

From the beginning, foreign capital was heavily concen- 
trated in Tallinn. About 75 percent of the first joint ventures 
were established in the capital; in March 1993, it was reported 
that 87 percent of all foreign capital invested in Estonia was 



49 



Estonia, Latvia, and Lithuania: Country Studies 

located in Tallinn and the surrounding area. Although the gov- 
ernment hoped that lower property taxes and lower wages 
might eventually entice more foreign capital to southern Esto- 
nia, most investors continued to be drawn to Tallinn for its 
higher-quality communications, better-trained personnel, and 
broader transportation opportunities. 

Among individual countries, Sweden continued to lead all 
others in both overall value of investments and as a percentage 
of total foreign investment — 37.7 percent in 1993 (see table 10, 
Appendix). Both the Norwegian company Statoil and the Finn- 
ish firm Neste also were heavily involved in the national econ- 
omy, building gasoline stations across Estonia. Tallinn's 
premier hotel, Hotel Palace, was owned by the Estonian-Finn- 
ish consortium Fin-Est. In 1992 Coca-Cola set up a joint ven- 
ture with the Estonian bottling plant AS Tallinna Karastus- 
joogid to produce soft drinks for the Estonian and Russian 
markets. In 1993 a four-story office building, the Tallinn Busi- 
ness Center, was opened by a United States development 
group. 

Estonia's transition to a market economy during 1991-93 
was eased considerably by the availability of more than US$285 
million in foreign aid, loans, and credits. Receipt of this finan- 
cial assistance was facilitated by the fact that Estonia, unlike 
many of the other countries of Eastern Europe, had no prior 
foreign debt. In addition, by claiming legal status as a formerly 
occupied country, Estonia, along with the other Baltic states, 
refused to accept liability for the Soviet Union's foreign debt. 
Instead, it claimed — and received the rights to — more than 
US$100 million worth of Estonian gold deposited in Western 
banks by the prewar republic and frozen after 1940. 

During 1992-93 Estonia received a total of about US$125 
million in humanitarian aid, including emergency shipments 
of fuel, grain, and medical supplies. In August 1992, Estonia 
signed its first memorandum with the IMF to secure a US$32 
million loan from the IMF and US$30 million from the World 
Bank (see Glossary). The memorandum obligated the Esto- 
nian government to balance its budget, to limit wage increases, 
to privatize state enterprises, and to maintain a strict monetary 
policy. Fourteen months later, the IMF released the first US$16 
million of its loan to Estonia, after it was satisfied that the gov- 
ernment has maintained its economic reforms. In early 1992, 
Estonia also had become a member of the European Bank for 
Reconstruction and Development, from which it would later 



50 



Estonia 



receive a total of US$46 million in loans for improving its 
energy industry. Other foreign loans were received from Japan, 
the United States, Sweden, and the European Union (see Glos- 
sary), among others (see table 11, Appendix). In addition, in 
December 1993 the European Investment Bank gave Estonia a 
credit worth 5 million European currency units (ECUs — see 
Glossary) for loans to small businesses. The credit was the first 
from an ECU200 million fund allocated to Baltic states 
through the European Union's Poland/Hungary Aid for 
Restructuring of Economies (PHARE) program. 

Property Reform 

Privatization, or the selling off of state property, represented 
the cornerstone of Estonia's efforts at property reform during 
1990-93. Although growth in simple private enterprise during 
this period contributed to the country's shift to capitalism, the 
allocation to private initiative of state-owned resources ranging 
from factories to kiosks was considered a more formidable 
engine for encouraging economic recovery. Much of Estonia's 
economy had been developed in accordance with central 
Soviet planning requisites, and it was unclear at first how viable 
many of Estonia's machine-building and metallurgical factories 
would be in the context of its small national economy. The fate 
of these enterprises remained unclear in the mid-1990s. In the 
meantime, however, Estonia had launched a successful small- 
and medium-scale privatization program, which showed 
impressive results after only two years. By August 1993, more 
than half of all registered Estonian enterprises were privately 
owned. 

As in many other East European countries, property reform 
in Estonia was intimately linked to issues of property restitu- 
tion. In Estonia's case, this meant the return of, or compensa- 
tion for, property nationalized by the Soviet regime in 1940. 
Estonia's political strategy for independence, with its stress on 
the illegality of Soviet rule, raised corollary questions and 
debates during 1989-90 about the legality of the Soviet Union's 
early nationalization of the economy. The principle of a politi- 
cal restoration of the prewar republic also generated pressures 
to recognize a kind of economic restoration — recognition of 
the right of previous property owners to reclaim their property 
or at least to receive just compensation. This, it was argued, was 
a simple matter of fairness to society. Thus, the tension 
between the equally compelling needs for efficient privatiza- 



51 



Estonia, Latvia, and Lithuania: Country Studies 

tion and for judicious restitution was acute. If one accepted the 
necessity of fostering new economic activity, the imperative to 
privatize was clear. Yet, in selling off state property, the govern- 
ment was in danger of wrongfully profiting from the sale of 
property taken from Estonian citizens in 1940. Determining 
which property could be privatized and which property might 
have claims on it soon became a legal tangle with long-term 
consequences. 

Despite some individual warnings as to the cost and rational- 
ity of such a move, in December 1990 the Estonian Supreme 
Soviet adopted a resolution voiding the Soviet government's 
1940 nationalization of property and recognizing the continu- 
ity of all prewar property rights. In addition, it set a deadline of 
December 27, 1991, for the submission of claims to local gov- 
ernment authorities for the return of property or compensa- 
tion. The authorities thereafter would decide upon the validity 
of these claims. In June 1991, the parliament passed a second 
law laying out the basic principles of property reform. Among 
this law's three explicit objectives was one calling for the 
"redress of injustice committed by the violation of property 
rights" under Soviet rule. More than 200,000 property restitu- 
tion claims were submitted, and much work in municipal 
archives to verify the claims lay ahead. 

Although opposed to restitution, the government of Prime 
Minister Edgar Savisaar (1990-92) relented, with the stipula- 
tion that for any prewar property radically altered during the 
Soviet era, such as reconstructed factories, only compensation 
would be offered. In addition, persons currently in houses and 
apartments subject to restitution claims got assurance that they 
would not be summarily evicted by the previous owners. With 
these ground rules, in June 1990 the Supreme Soviet passed 
the Law on Property, legalizing various forms of property, 
including individually owned property. The government 
moved to create the State Property Board (Riigivaraamet) in 
August to supervise the privatization of at least small businesses 
and services, which would help to stimulate the economy. 
These enterprises mostly had been created during the Soviet 
era and thus were free from potential restitution claims. In 
early 1991, the board began selling off an estimated 3,000 such 
enterprises, among them small booths and shops, service out- 
lets, and catering facilities. Initially, preference was given to 
employee buyouts, but public auctions later became the 
method of choice in order to speed up the process. By Septem- 



52 




View of historic Tallinn 
Street in small town near Viljandi 
Courtesy Priit Vesilind 



53 



Estonia, Latvia, and Lithuania: Country Studies 

ber 1992, out of a total of 855 enterprises approved for sale, 
558 had been sold. Service enterprises proved easiest to sell, 
although retail establishments were not far behind. 

Experimentation with large-scale privatization began in mid- 
1991. Two machine-building factories, as well as the Tallinn 
taxi depot, were chosen as the first properties to be sold. Pref- 
erence again was given to employee buyouts, which in the case 
of large-scale enterprises, however, proved to be unwieldy 
because several competing groups emerged. The experimental 
enterprises soon became mired in controversy, and the policy 
of relying solely on local capital was abandoned. After the 
adoption of the new currency in mid-1992, privatization was 
reinvigorated. 

In a change of procedure, the government set up the Esto- 
nian Privatization Enterprise (Eesti Erastamisettevote — EERE) 
to begin dealing with the direct sale of large-scale enterprises 
to foreign and domestic investors. The EERE was modeled 
after the successful German agency Treuhandanstalt, with 
which the EERE signed a cooperation agreement. In Novem- 
ber 1992, the EERE offered its first thirty-eight enterprises for 
sale through widespread advertising in local and Western news- 
papers. Yet, scarcely ten days later, the newly elected prime 
minister, Mart Laar, halted the process. He claimed that several 
restitution claims were outstanding vis-a-vis the advertised 
properties and charged that the EERE had too much power. 
Although the controversy took some time to resolve, the 
EERE's program was back on track by 1993. In May it offered 
another fifty-four enterprises for sale; in November forty enter- 
prises were put on the block. In each case, sealed bids were 
accepted by the EERE from foreign and local investors until a 
certain date. Thereafter, the EERE attempted to negotiate a 
sale with the highest bidder based on development plans for 
the new enterprise as well as promises to retain a certain num- 
ber of employees. The early sale offers by the EERE attracted 
widespread interest. In April 1993, the Estonian parliament 
sweetened the incentive to bid by allowing foreign investors to 
buy the land underneath any privatized property, rather than 
rent. About half of the enterprises put up in the first two 
rounds found buyers. Often, however, enterprises were broken 
up, with only parts being sold off. Many initial sales secured 
guarantees of employment for up to 60 percent of the acquired 
enterprise's employees. 



54 



Estonia 



In the summer of 1993, Estonia merged its two privatization 
firms, the State Property Board and the EERE, to create the 
Estonian Privatization Agency (Eesti Erastamisagentuur — 
EEA). The privatization of small enterprises was coming to a 
close, and the process needed to be consolidated. During 
1991-92 the government sold 676 properties for a total of 
EKR64.3 million. By October 1993, another 236 small enter- 
prises had been sold for a total of EKR169 million. Roughly 40 
percent of these were in Tallinn. A total of EKR117.8 million 
had been garnered from the sale of the first thirty large-scale 
enterprises. According to an EEA official, these deals had 
secured some EKR52 million in investment and provided guar- 
antees for 4,900 jobs. 

By 1993 three property reform tasks remained. First, a wide 
variety of mostly unprofitable state enterprises had yet to be 
sold off. Second, the issue of how to provide compensation for 
prewar property claimants remained unresolved. Third, the 
process of housing privatization, in which the average resident 
was most interested, had yet to begin. These three tasks were all 
addressed in a Law on Privatization passed by the Riigikogu in 
June 1993. Throughout 1993 all adult residents had begun reg- 
istering themselves and their work histories to qualify for a spe- 
cific amount of national capital vouchers (rahvakapitali 
obligatsioonid — RKOs) based on their years of active employ- 
ment and service to the economy. According to the new Law 
on Privatization, residents could use their RKOs toward the 
purchase of their apartments based on apartment values set by 
the government. If a resident lived in a house or did not wish 
to buy an apartment, he or she could buy into investment 
funds, which were to be the main players in the sale of remain- 
ing state property. In addition, individuals could invest in pen- 
sion funds backed by the government. Finally, prewar property 
claimants who were due compensation for their losses were 
issued compensation securities, which they could use in any of 
the new investment modes. According to Liia Hanni, a former 
government minister, in 1992 the state still held about EKR36 
billion worth of property, of which EKR7 billion worth was 
housing stock. An estimated EKR15 to EKR25 billion worth of 
RKOs would be issued, along with EKR12 to EKR15 billion in 
property compensation. 



55 



Estonia, Latvia, and Lithuania: Country Studies 

Economic Sectors 

Industry 

The Estonian industrial sector suffered more than other sec- 
tors during the country's transition to a market economy. Most 
of Estonia's heavy industry had been developed and managed 
by central planners in Moscow with imported labor from Rus- 
sia. In 1990 only sixty-one of 265 industrial enterprises were 
under direct Estonian control. Forty enterprises, which 
accounted for 12 percent of Estonia's industrial production, 
were controlled directly from Moscow. Because many of these 
were defense related, even Estonian authorities had limited 
access to them. After independence was regained in 1991, Esto- 
nia acquired all of the industrial enterprises on its territory and 
faced the challenge of finding them a place in a market econ- 
omy. 

In 1990 industry accounted for about 40 percent of GDP 
(42.5 percent in 1992) and 33 percent of employment. Within 
the sector, food processing was the largest subsector, account- 
ing for 30.4 percent of production in 1992 (up from 24.5 per- 
cent in 1990). It was followed by light industry at 17.9 percent 
(down from 26.3 percent in 1990) (see table 12, Appendix). 

Industrial production began to fall drastically as supplies of 
raw materials from the Soviet Union dwindled. The World 
Bank reported that in the first nine months of 1991, industrial 
activity decreased by 10 percent over the previous year's corre- 
sponding period. According to the Estonian State Statistics 
Board, during 1992 total production fell another 39 percent 
from 1991. In 1993, as enterprises began slowly buying raw 
materials on the world market, production in some areas 
began to increase. Although overall output was still down in 
1993, it increased by an estimated 7 percent in 1994. Estonia's 
best hope lay with its lighter industries: food processing, tex- 
tiles, furniture, paper, and glass. Many of these relied on 
domestic raw materials and hence were able to continue pro- 
ducing during the transition. Estonia's metallurgical and chem- 
ical industries showed the greatest decline, and their future was 
in doubt without new technology and markets. 

Agriculture 

Like the rest of the economy, Estonian agriculture has been 
in great flux since the degeneration of the collective and state 
farm systems. In 1991 roughly 12 percent of the labor force was 



56 



Strip mining of oil shale in 
northeastern Estonia 
Courtesy Priit Vesilind 



Estonia, Latvia, and Lithuania: Country Studies 

employed in agriculture, producing 15.4 percent of Estonia's 
GDP. Estonia has some 1.3 million hectares of agricultural 
land, nearly 1 million hectares of which are arable. During the 
Soviet era, arable land decreased by nearly 405,000 hectares, 
much becoming forest. Collectivization in the late 1940s and 
1950s brought great hardship to Estonian agriculture, which 
during the first independence period had been the mainstay of 
Estonian society. Still, Estonian agriculture remained more 
productive than the Soviet average. In 1990 there were 221 col- 
lective and 117 state farms with an average of 350 to 400 work- 
ers each. The average livestock herd per farm included 1,900 
cattle and 2,500 pigs. Estonia was a net exporter of meat and 
milk to the other republics. Agriculture also served as the basis 
for the republic's strong food-processing industry (see table 13, 
Appendix). For its meat production, however, Estonia relied 
heavily on feed grain from Russia. When the republic sought to 
cut back on meat exports in the late 1980s, Russia retaliated by 
slowing the provision of feed grain, which cut Estonian produc- 
tion even further. Increases in fuel prices and a general fuel cri- 
sis in early 1992 also hit agricultural production very hard. 
Although the total area of field crops grew in the early 1990s, 
total production and average yields fell markedly (see table 14, 
Appendix) . 

Reform of Estonia's agricultural system began in December 
1989 with adoption of the Law on Private Farming. The law 
allowed individuals to take up to fifty hectares of land for pri- 
vate planting and for growing crops. The land was heritable but 
could not be bought or sold. The goal of the reform was to 
stimulate production and return the spirit of private farming to 
a countryside worn down by decades of central planning. Six 
months after implementation, nearly 2,000 farms were set up, 
with several thousand waiting for approval. A year later, more 
than 3,500 private farms were operating. Starting in October 
1991, farmers were allowed to own their land. This boosted the 
number of farms to 7,200 by early 1992. As of the first half of 
1993, a total of 8,781 farms had been created, covering approx- 
imately 225,000 hectares, or a quarter of Estonia's arable land. 

In May 1993, the Estonian parliament passed a law on prop- 
erty taxes, which had been a major concern for many farmers 
before getting into business. The law mandated a 0.5 percent 
tax on property values to be paid to the state and a 0.3 to 0.7 
percent share to be paid to local governments. More than 
property taxes, the costs of commodities such as fuel and new 



58 




Kunda cement factory 
Dock facilities at harbor of Tallinn 
Courtesy Priit Vesilind 



59 



Estonia, Latvia, and Lithuania: Country Studies 

equipment were considered most likely to prove burdensome 
to many new farmers. 

With the introduction of private agriculture, many collective 
farms began to disintegrate. Corruption and "spontaneous 
privatization" of farm equipment by farm directors grew. A 
number of Estonia's more successful farms were reorganized 
into cooperatives. Over the long term, the government pre- 
dicted that 40,000 to 60,000 private farms averaging fifty hec- 
tares would be optimal. At the same time, Estonians were likely 
to maintain a very high rate of consumption of home-grown 
fruits and vegetables. A 1993 survey by the Estonian State Statis- 
tics Board indicated that nearly 80 percent of all potatoes con- 
sumed by Estonians either were privately grown or were 
received from friends or relatives. Thirty percent of eggs were 
received outside the market as well as 71.5 percent of all juice. 
Overall, Estonians reported getting over 20 percent of their 
food from private production or from friends or relatives. 

Estonia has 1.8 million hectares of forest with approximately 
274 million cubic meters of timber. Accounting for about 9 per- 
cent of industrial production in 1992, forest-related industries 
seem likely to grow further in the 1990s, thanks to expanding 
furniture and timber exports. 

The fishing industry, once entirely under Soviet control, also 
has the potential to contribute to the country's economy. With 
230 ships, including ninety oceangoing vessels, this profitable 
industry operated widely in international waters. A large share 
of Estonia's food-industry exports consists of fish and fish prod- 
ucts. In 1992 about 131,000 tons of live fish were caught. 

Energy and Natural Resources 

Estonia is an exporter of electrical energy, but it is wholly 
dependent on the outside market for oil fuels and natural gas. 
Oil shale deposits estimated at 5 billion tons in the country's 
northeast help to fuel two large thermal power plants near the 
town of Narva (see fig. 5). Roughly 23 million tons of oil shale 
were mined per year up to the early 1990s. In 1990 Estonia pro- 
duced about 17.2 billion kilowatt-hours of electricity, of which 
about 8.5 billion were exported to Russia and Latvia. By 1992, 
however, export production of electricity had dropped by more 
than one-half because of falling demand in Russia. These cut- 
backs in turn forced a slowdown in oil-shale mining, although 
no exact figures were available. In many mines, miners were 
employed only three or four days per week. The decline in ton- 



60 



Estonia 



nage also increased relative production costs. In order to start 
bringing Estonian oil shale closer to world prices and to cover 
costs, mining officials called in 1993 for an increase in the state 
price per ton from EKR36 to EKR50. The government resisted 
at first, fearing a corresponding rise in electricity prices and a 
new wave of inflation throughout the economy but eventually 
allowed oil shale producers to raise the price of their products 
to EKR45 per ton. 

After independence, Estonia endeavored to sign barter 
agreements with Russia to exchange Estonian electricity and 
food for Russian oil and gas. Transportation problems in Rus- 
sia caused this arrangement to break down in early 1992. The 
ensuing fuel shortages forced Estonia to venture onto the open 
market for the first time. In the interim, Russian oil prices 
began to approach the world price, meaning Estonia would 
find it just as competitive to begin buying fuel from other coun- 
tries. In March 1993, two new oil terminals were opened near 
Tallinn, which will facilitate imports in the future. Foreign 
companies, such as Finland's Neste and Norway's Statoil, also 
began entering the Estonian gasoline market, building several 
modern filling stations in Tallinn and the surrounding areas. 
Meanwhile, the Estonian state oil company, Eesti Kutus, was 
forced to sell off many of its holdings and drastically scale back 
its operations in mid-1993 in order to pay an estimated EKR250 
million in debts and back taxes. The company's market share 
was expected to drop from 70 percent to 30 percent. 

Dependence on Russia for natural gas continued, with Esto- 
nia consuming about 1.3 billion cubic meters of Russian natu- 
ral gas in 1990. Energy was in fact often used as a political 
weapon during the early 1990s. Estonia's two thermal power 
plants, for example, were staffed mostly by Russian workers 
who, to protest Estonian government policies, repeatedly 
threatened to shut down the plants. Although any disruption 
in production would also affect neighboring Russia, the possi- 
bility of problems persisted. Russia in turn threatened Estonia 
with a cutoff of gas supplies in June 1993 during the crisis sur- 
rounding Estonia's Law on Aliens (see Government and Poli- 
tics, this ch.). The Russian gas company Lentransgas once shut 
down its pipelines to Estonia for a single day, ostensibly 
because of Estonia's US$10 million in unpaid bills. Also, Rus- 
sian leaders often threatened economic sanctions for what they 
called discrimination against Estonia's Russian minority. 



61 



Estonia, Latvia, and Lithuania: Country Studies 



International boundary 

® National capital 
• Populated place 

25 50 Kilometers 



<Bakic 
Sea 

HlfUMAA 




/ Boundary representation 

"ftfga not necessarily authoritative 



Machinery 

Textiles 
Q Food processing 
J? Wood processing 
[X] Paper 

S Construction materials 



h Furniture 
W Oil-shale mining 
m Chemicals 
^4 Fishing 
Dairying 



# Flax 
A Peat 



Thermal power plant 
Electric powerline 
Natural gas pipeline 



Figure 5. Economic Activity in Estonia, 1995 



Transportation and Telecommunications 

Estonia had a total of 30,300 kilometers of public roads 
(29,200 kilometers hard-surfaced and 1,100 kilometers un- 
paved) in the early 1990s. These was little traffic congestion, 
thanks to the relatively low number of automobiles per per- 
son — 140 per 1,000 inhabitants. Estonia's major roads include 
Highway Mil to St. Petersburg and Highway M12 to Riga. In 
1990 the roads carried 214 million tons of freight, or 85 per- 



62 



Estonia 



cent of the total freight for that year. Estonian officials, for 
their part, were seeking to increase international truck trans- 
port through the country by encouraging the development of 
an international highway project, Via Baltica, from Tallinn to 
Warsaw (see fig. 6). 

Bus transportation was widely developed during the Soviet 
period, totaling 4.5 billion passenger-kilometers in 1990. By 
1993 the removal of state subsidies had forced an increase in 
ticket prices, a decline in ridership, and a contraction of ser- 
vice. New international routes, however, were opened to Ger- 
many and Denmark. 

With a total of 1,126 kilometers of track, railroads in Estonia 
carried 30 million tons of freight and 16 million passengers in 
1993. Estonia's main rail lines link Tallinn with Narva and St. 
Petersburg, Tartu with the Russian city of Pskov, and Parnu 
with Riga. More than 130 kilometers of rail line are electrified. 

The country's main airport, located in Tallinn, can serve 
medium-sized jets and accommodate up to 2 million passen- 
gers per year. Airports are also located in Tartu and Parnu at 
former Russian air force bases. Domestic air service is provided 
only to Estonia's islands. In September 1991, the country inher- 
ited a fleet of about fifteen airplanes from the Soviet airline 
Aeroflot. It had a fleet of sixteen aircraft in 1992. A state air- 
line, Estonian Air, was launched in December. In 1992 it served 
twelve international destinations — Amsterdam, Copenhagen, 
Frankfurt, Helsinki, Kiev, Minsk, Moscow, Riga, St. Petersburg, 
Sochi (Russia), Stockholm, and Vilnius — and carried nearly 
175,000 passengers. Service is also provided by other airlines, 
including Aeroflot, Drakk Air Lines, Finnair, Lithuanian Air- 
lines, SAS (Scandinavian Airlines), and Lufthansa. 

International shipping was a major source of foreign cur- 
rency for Estonia under the Soviet regime. In the early 1990s, 
the state-owned Estonian Shipping Company operated a fleet 
of eighty-two vessels with a carrying capacity of 500,000 tons. 
Narva is the main inland port. Five hundred kilometers of 
inland waterways are navigable year round. Estonia's three 
main commercial ports are all located around Tallinn; together 
they handled about 10 million tons of cargo in 1991. The 
Tallinn port continued to be a transit point for trade shipments 
to Russia, particularly grain. Ferry traffic out of Tallinn grew 
exponentially in the early 1990s. In 1992 an estimated 1.3 mil- 
lion people crossed between Tallinn and Helsinki, while traffic 
was said to be still growing at 50 to 60 percent a year. In 1990 



63 



Estonia, Latvia, and Lithuania: Country Studies 



— • • — International boundary 

® National capital 

• Populated place 

— 1 — 1 — H Railroad 

Road 

■I Major port 

+ Major airport 

25 50 Kilometers 




Figure 6. Transportation System of Estonia, 1995 



overnight ferry service was started to Stockholm; freight ser- 
vice to Germany followed later. Disaster struck on September 
28, 1994, however, when a ferry owned by Estline, a Swedish- 
Estonian joint venture, sank in the Baltic Sea, killing more than 
900 passengers. 

Telecommunications required much modernization in Esto- 
nia after independence. Poor-quality telephone connections 
and outmoded equipment were among the major problems. 
The number of international lines was increased during the 
early 1990s, and beginning in 1993 new digital switchboards 
were being installed to replace old mechanical ones. The coun- 
try's first mobile telephone networks were set up in 1990. Est- 
telecom, the state telecommunications company, had approx- 
imately 341,000 subscribers in 1992. However, unmet demand 
because of a shortage of lines indicated the existence of 
another 150,000 potential customers. Only two-thirds of tele- 



64 



Estonia 



phone customers had long-distance access within Estonia and 
to the former Soviet Union. To improve service, Esttelecom 
was negotiating with Swedtel of Sweden for outside investment 
and the creation of a joint telecommunications venture. In 
1993 there were approximately 600,000 television receivers in 
use, or one television per 2.6 persons. There was one radio per 
1.7 persons and one telephone per 3.9 persons. 

Tourism 

Tourism was a major area of growth for Estonia in the late 
1980s and even more so after independence. With the expan- 
sion of ferry and air links, Estonia began to receive a growing 
number of visitors from Western countries as the number of 
tourists from the former Soviet Union dropped off. In 1990 the 
number of tourists was estimated at 500,000; by the mid-1990s, 
that figure was expected to top 1 million. New accommoda- 
tions were being built, and several of Tallinn's major hotels 
were being privatized. Estonia established visa requirements for 
visitors after independence but soon rescinded them for many 
European countries, the United States, and Canada. The Baltic 
states also signed agreements allowing foreigners to travel with 
one country's visa in all three states. Tallinn's medieval old 
town, although in need of repairs, is Estonia's main tourist 
attraction. Many visitors also tour Tartu and the island of Saare- 
maa. The greatest number of visitors come from Finland and 
Sweden. Net tourism receipts totaled about EKR26 million in 
1992. 

Government and Politics 

Estonia's new era of democratic politics began slowly in the 
1990s with the adoption of a new constitution and the forma- 
tion of stable political groupings. Several mechanisms in the 
constitution were beginning to function to ensure a balance of 
power and steady government. Citizenship issues, however, 
caused tensions among the country's 500,000-strong Russo- 
phone population, most of whom had been denied automatic 
citizenship rights in 1991. Their naturalization and integration 
into Estonian society remained a significant challenge. 

Current Politics 

The election in September 1992 of a new parliament, the 
Riigikogu, and the formal restoration of the Republic of Esto- 



65 



Estonia, Latvia, and Lithuania: Country Studies 

nia marked the opening of a new political era. Not only was a 
new set of deputies elected, but Estonia took a further step in 
defining its political forces and developing a new political cul- 
ture. As expected, right-wing parties did best in the electoral 
poll, promising "to clean house" and offer a fresh beginning 
after the Soviet era. The contest for the 101-seat Riigikogu 
yielded a three-party center-right coalition government hold- 
ing fifty-two seats. The Fatherland Party (Isamaa) led the coali- 
tion with thirty seats, the Estonian National Independence 
Party (Eesti Rahvusliku Soltumatuse Partei) had ten seats, and 
the Moderates (Moodukad — made up of the Social Democratic 
Party and the Rural Center Party) had twelve seats. In opposi- 
tion were the Coalition Party (Koonderakond), the Rural 
Union (Maaliit), the Estonian Center Party (Eesti Keskera- 
kond), the Royalist Party (Rojalistlik Partei), and the Estonian 
Citizens Union (Eesti Kodanike Liit). Because noncitizens were 
not allowed to vote in the election, most of Estonia's Russian 
population was excluded from the poll. Consequently, the new 
Riigikogu was 100 percent ethnic Estonian. 

The 1992 elections also saw a special contest for the largely 
ceremonial post of president. Although the new constitution 
stipulates that the president shall be elected by the parliament, 
the Constitutional Assembly in early 1992 succumbed to popu- 
lar pressure and agreed to have the country's first president 
elected by the people. In the resulting poll, the incumbent 
chairman of the parliament, Arnold Riiutel, topped the list. 
But with only 41.8 percent of the vote, he did not muster the 
majority needed for direct election under the special rules. 
Although a former communist, Riiutel had been widely 
admired for his steady, balanced leadership during the inde- 
pendence struggle. Yet, his electoral shortfall was enough to 
throw the final decision into the Riigikogu, where the runner- 
up, with 29.5 percent, Isamaa candidate and former foreign 
minister Lennart Meri, had the advantage. At the parliament's 
opening session on October 5, Meri defeated Riiutel by a vote 
of fifty-nine to thirty-one. 

In mid-October Mart Laar, the thirty-two-year-old chairman 
of Isamaa, was appointed prime minister by President Meri. 
The youngest person ever to hold that post, Laar promised 
immediately to expand Estonia's free-market reforms and 
defend Estonian national interests. During his first fourteen 
months in office, Laar cut tax rates and maintained control 
over expenditures (see Economy, this ch.). He also posted 

66 



Estonia 



some foreign policy successes, such as Estonia's admission to 
the Council of Europe (see Glossary) in May 1993. His cabinet, 
however, was plagued by inexperience. Four months into 
office, Laar's choice for economy minister resigned after accu- 
sations that he was not up to the job. In January 1993, the 
defense minister, an emigre Estonian, Hain Rebas, caused a 
scandal when he allowed some 250 Russian soldiers to enter 
Estonia just as the country was negotiating their withdrawal 
with President Yeltsin. In August a mutiny by a handful of Esto- 
nian soldiers in western Estonia prompted Rebas to resign alto- 
gether. In December 1993, President Meri was obliged to 
dismiss Minister of Interior Lagle Parek, a longtime dissident 
during Soviet rule, for several scandals involving her manage- 
ment of ministerial affairs (see National Security, this ch.). 

In June 1993, Laar's government suffered its greatest tur- 
moil when a major political crisis erupted over passage of a law 
meant to regulate the status of noncitizens (mostly Russians) in 
the country. Russian groups criticized the 1993 Law on Aliens 
as discriminatory, and for the first time some of Estonia's key 
Western allies, including the United States, the Scandinavian 
states, and the European Union, raised objections. The Law on 
Aliens as originally adopted would have required all nonciti- 
zens to reapply for residency permits within two years without 
any guarantee of acceptance. In July, after President Meri 
vetoed the law and requested a review of it from the Council of 
Europe and the Conference on Security and Cooperation in 
Europe (CSCE — see Glossary), the Riigikogu agreed to amend 
the measure and guarantee most noncitizens new permits. The 
domestic crisis prompted President Meri to establish the 
Nationalities Roundtable for future discussion of minority 
affairs. The United States and Sweden immediately supported 
the roundtable with financial contributions to cover its operat- 
ing costs. In the ensuing months, the roundtable met several 
times, but no major decisions were reached. 

The results of Estonia's first post-Soviet local elections, held 
in October 1993, reflected public reaction to the government's 
series of setbacks and the continuing hardships caused by eco- 
nomic reform. In all the major cities, Isamaa did poorly. 
Former prime minister Tiit Vahi's Coalition Party was the big 
winner, especially in Tallinn, where it won eighteen of sixty- 
four seats. Russian parties also reemerged on the political 
scene, supported mostly by noncitizen voters, who, under a spe- 
cial constitutional provision, were allowed to vote. In Tallinn 



67 



Estonia, Latvia, and Lithuania: Country Studies 

the moderate Russian Democratic Movement won eighteen 
seats. Despite this midterm upset and a continuing decline in 
public opinion polls, the Laar government later easily survived 
a vote of no confidence in parliament. In December it suc- 
ceeded in passing a tax cut as well as a budget for 1994. To 
shore up the Isamaa-led coalition, in January 1994 four key 
portfolios in the Council of Ministers (defense, economy, 
finance, and foreign affairs) were reshuffled. However, the coa- 
lition disintegrated in June 1994 after a series of embarrass- 
ments, most notably the allegation that the prime minister had 
been involved in the secret transfer of a large sum of Russian 
rubles to the breakaway Russian republic of Chechnya in 1992. 
In September 1994, Laar lost a vote of no confidence in the 
Riigikogu. After President Meri's nomination of Bank of Esto- 
nia president Siim Kallas to succeed Laar was rejected, the 
Riigikogu confirmed Andres Tarand, the outgoing minister of 
environment, as prime minister in October. Tarand was to 
serve as a caretaker until the general elections in March 1995. 

Constitutional Foundations 

Under the constitution adopted on June 28, 1992, Estonia 
has a parliamentary system of government, with a prime minis- 
ter as chief executive. Parliament also elects a president, whose 
duties are largely ceremonial, although the first holder of this 
office, Lennart Meri, sought to assert his independence. The 
constitution also governs the work of a legal chancellor, an 
auditor general, and the National Court. 

The constitution opens with a set of general provisions and a 
forty-eight-article section establishing the fundamental rights, 
liberties, and duties of citizens. Freedom of expression and 
assembly, freedom of information, the right to petition the 
courts, and the right to health care are all guaranteed. Censor- 
ship and discrimination on the basis of nationality, gender, reli- 
gion, or political belief are forbidden. The official language of 
Estonia is Estonian. However, in deference to heavily Russian 
areas of northeastern Estonia, the constitution allows for the 
use of other languages in local government where the majority 
of the population is non-Estonian. Article 9 of the constitution 
guarantees equal constitutional rights to both citizens and non- 
citizens living in Estonia. Noncitizen permanent residents are 
also allowed to vote in local elections. Noncitizens may not, 
however, join political parties or hold elected office. 



68 



II » 
■■ t MM 




Parliament building, Toompea Hill, Tallinn 
Courtesy Stanley Bach 



The Riigikogu (State Assembly), which replaced the transi- 
tional Supreme Council in 1992, has 101 members, who are 
chosen every four years by popular election. Members must be 
at least twenty-one years old. Each member may belong to only 
one committee. The president of the republic is elected to a 
five-year term by a two-thirds majority of the Riigikogu. The 
president nominates the prime minister, who must receive a 
vote of confidence from the Riigikogu. The Riigikogu passes 
legislation as well as votes of no confidence in the government. 
The president can dissolve parliament if there is a prolonged 
delay in the nomination of a prime minister or in the adoption 
of a state budget, or after a vote of no confidence in the gov- 
ernment. 

The president promulgates all laws after their adoption by 
the Riigikogu. However, he or she may also refuse to promul- 
gate (i.e., veto) a law and send it back to the Riigikogu for 
reconsideration. If the Riigikogu passes the same law again by a 
simple majority, the president's veto is overridden. In 1993 
President Meri vetoed seven laws, most of which were later 
modified by the Riigikogu. An early string of vetoes in the 
spring of 1993 especially angered members of the government 



69 



Estonia, Latvia, and Lithuania: Country Studies 

coalition in parliament who had helped to elect him. Meri 
declared it his obligation, however, to protect the balance of 
power in government. His involvement was particularly critical 
during the domestic and international crisis surrounding Esto- 
nia's Law on Aliens. 

The legal chancellor is appointed by the Riigikogu to a 
seven-year term and provides guidance concerning the consti- 
tutionality of laws. This official has no powers of adjudication 
but can issue opinions and propose amendments. Both the 
legal chancellor and the president may appeal to a special com- 
mittee of the National Court for a binding decision on any law, 
national or local, that they consider unconstitutional. The 
court system comprises rural and city, as well as administrative, 
courts (first-level); district courts (second-level); and the 
National Court, the highest court in the land. Criminal justice 
is administered by local first-level courts as well as by second- 
level appellate courts. Final appeal may be made to the 
National Court, which sits in Tartu. 

Central government policy at the regional level is carried 
out by the administrations of Estonia's fifteen counties (maa- 
konnad). These counties are further subdivided into 255 local 
administrative units, of which forty-two are towns and 213 are 
townships (vald). Local councils are elected for a three-year 
term by permanent residents of the towns and townships. 

Mass Media 

The mass media in Estonia played a catalytic role in the dem- 
ocratic upsurge of the late 1980s that led to independence. 
Responding during 1985-86 to Mikhail S. Gorbachev's call for 
glasnost (openness), the Estonian media, especially newspapers, 
began to focus on the many social and economic problems 
afflicting the country at the time. Yet, the blame for these 
social and economic ailments soon began to fall on the politi- 
cal system, an outcome that Gorbachev had not intended. For 
instance, the fight against an extensive and environmentally 
dangerous plan to mine phosphorus in northeastern Estonia 
was energized in 1987 by several articles in the monthly Eesti 
Loodus. The Tartu daily Edasi (later renamed Postimees) would 
become a lively forum for the discussion of economic reforms 
such as Estonia's economic autonomy plan, the IME plan. The 
daily newspaper of Estonia's Komsomol, Noorte Hdal, took the 
lead in exposing the abuse many young Estonian men were suf- 
fering in the Soviet army. Many Estonian cultural publications, 



70 



Estonia 



such as the weekly newspaper Sirp ja Vasar and the monthly 
journals Looming and Vikerkaar, carried historical overviews of 
Estonia's annexation in 1940 and of the deportations that fol- 
lowed. Finally, on television and radio, several roundtable 
debate programs were aired, where more ideas were articu- 
lated. As political mobilization grew, the mass media became 
interactive players, reporting on the new events while giving 
further voice to varied opinions. 

The Estonian-language media operated in sharp contrast to 
Estonia's two main Russian-language dailies, Sovetskaya Estoniya 
(later renamed Estoniya) and Molodezh' Estonii, whose editors 
took a defensive stance toward rising Estonian nationalist feel- 
ing. The Russian community in Estonia was more heavily influ- 
enced by local communist party leaders, who remained loyal to 
Soviet rule. The Russian-language newspapers also echoed 
some of the views of the Intermovement and other Soviet loyal- 
ist groups. In the aftermath of independence, both newspapers 
were left searching for a new identity, as was most of the Rus- 
sian community now living as a minority cut off from Russia. 

In the early 1990s, the Estonian media diversified greatly as 
competition among newspapers grew The flashy weekly Eesti 
Ekspress, run by a Finnish-Estonian joint venture, captured 
much of the early market, but it was soon joined by other rivals. 
Business-oriented publications emerged, such as Aripaev, a joint 
venture with Sweden's Dagens Industri. In 1992 a new daily, Hom- 
mikuleht, was launched by a group of private investors. Estonia 
was also the base for the Baltics' largest circulating English-lan- 
guage newspaper, Baltic Independent. Still, the growth in the 
number of newspapers could not compensate for a rise in sub- 
scription rates and a decline in overall readership. Print runs 
fell from nearly 200,000 in 1990, when newsstand copies cost 
the equivalent of US$0.05, to an average of 40,000 in 1993. 
Still, in 1993 there were approximately 750 serial publications 
in Estonia, three times the number in 1987. 

Television and radio changed as well. During 1992-93 three 
commercial radio stations went on the air. Each offered a mix 
of rock music, news, and features. State-owned Estonian Radio 
spun off one of its two stations to compete with the new for- 
mats. Several regional radio stations also began broadcasting. 
Estonian state television received competition in the fall of 
1993 when the government gave rights to three companies to 
start broadcasting on two channels previously used by Russian 
television. Earlier, the government had decided to stop paying 



71 



Estonia, Latvia, and Lithuania: Country Studies 

for the rebroadcast of the Moscow and St. Petersburg channels 
in Estonia. 

Foreign Relations 

Both before and after independence, Estonia's foreign pol- 
icy had a strong Western orientation. Western recognition of 
Estonia's legal independence was a key source of strength for 
the republic in its struggle with the Soviet Union. After 1991 
Estonia worked to maintain that relationship and integrate 
with European political institutions as a further safeguard 
against potential threats from Russia. The last Russian troops 
stationed in Estonia after 1991 finally were withdrawn in 
August 1994, but relations with Yeltsin's Kremlin remained 
cool. Growing instability in Russia and Western attempts to pla- 
cate Russian nationalism left Estonia anxious for greater Euro- 
pean security guarantees but wary of being squeezed again in 
great-power politics. 

Relations with the West 

During 1990-91 Estonia undertook a vigorous lobbying cam- 
paign on behalf of international support for its bid for inde- 
pendence from the Soviet Union. The Estonian foreign 
minister at the time, Lennart Meri, was one of several Estonian 
officials who traveled widely to sustain the Western commit- 
ment to the republic's independence. Although the West gen- 
erally remained in favor of renewed statehood for Estonia and 
the other Baltic states, Western leaders believed that the real 
key to that independence lay in Moscow. In August 1991, 
release of that key came in the form of the attempted coup 
d'etat by conservative elements of the Soviet government. 

In the wake of independence, Estonia moved quickly to join 
the international community. In September it was admitted to 
both the United Nations (UN) and the CSCE. In the UN, Esto- 
nia would later find common ground with the East European 
countries as well as participate in the organization's various 
committees and auxiliary bodies, such as the United Nations 
Educational, Scientific, and Cultural Organization (UNESCO), 
the United Nations Conference on Trade and Development 
(UNCTAD), the International Atomic Energy Agency (IAEA), 
and the United Nations Development Programme (UNDP). In 
March 1992, Estonia took part in the creation of the Council of 
Baltic Sea States, an association of all the countries bordering 



72 



Estonia 



the Baltic Sea and dedicated to furthering regional economic 
and political cooperation. A year later, the Estonian representa- 
tive was elected to a one-year term as president of the organiza- 
tion. In the realm of security, Estonia joined the North Atlantic 
Cooperation Council (NACC) in late 1991 and actively sought 
support for its efforts to become a member of the North Atlan- 
tic Treaty Organization (NATO). Cooperation with the Euro- 
pean Union included significant economic aid as well as talks 
on a free-trade agreement. 

Estonia's greatest foreign policy success came in May 1993 
with its admission to the Council of Europe. After applying in 
September 1991, Estonia had to hold its first free parliamen- 
tary elections in 1992 before being seriously considered for 
membership. Although Estonia's citizenship policy came under 
close scrutiny by council delegations, in the end they accepted 
Estonia's legal arguments for denying automatic citizenship to 
Soviet-era immigrants, taking encouragement from the nonciti- 
zens' right to participate in local elections. Estonia considered 
admission the equivalent of a clean bill of health for its young 
democracy, which Russia had sought to tarnish with accusa- 
tions of human rights violations. 

In the mid-1990s, Estonia's staunchest foreign allies were the 
Scandinavian countries, particularly Denmark and Sweden. In 
1990 the three Baltic states established regular contacts with 
the Nordic Council, the main political organization uniting the 
five Scandinavian states. Denmark's prime minister, Poul 
Schluter, became in 1991 the first Western head of government 
to visit Estonia. The Swedish prime minister, Carl Bildt, became 
an outspoken defender of Estonia after Russian threats to 
impose economic sanctions on Tallinn heightened tensions in 
1993. 

In some respects, the development of Scandinavian ties 
appeared to be a higher priority for Estonia than the fostering 
of greater Baltic cooperation, begun during the three repub- 
lics' common struggle for independence. Baltic leaders held 
regular summit meetings beginning in 1990 and issued numer- 
ous joint declarations concerning their relations with Russia. 
An interparliamentary Baltic Council was established in 1990 
to promote further cooperation at semiannual meetings. In 
mid-1993 Baltic military commanders even met to discuss plans 
for a joint infantry battalion that would be offered for peace- 
keeping missions around the world. Yet, progress on a free- 
trade agreement among the three countries was slow, and this 



73 



Estonia, Latvia, and Lithuania: Country Studies 

situation was not helped in 1992 when Estonia elected a center- 
right government while Lithuania voted back in Algirdas Braza- 
uskas and the former communists. Ultimately, a free-trade 
agreement was signed in April 1994. 

Estonia's relations with the United States were strong, 
although the George H.W. Bush administration's initial delay 
in establishing diplomatic ties with the republic disappointed 
many in Tallinn. The United States held off recognition for sev- 
eral days in deference to Mikhail S. Gorbachev. However, Secre- 
tary of State James A. Baker visited all three Baltic states in 
September 1991 and five months later was followed by Vice 
President J. Danforth Quayle. Relations with the William J. 
Clinton administration appeared solid, although some Esto- 
nian officials expressed concern about what they perceived as 
its unqualified support for Russian president Boris N. Yeltsin. 

Relations with Russia 

Estonia's ties with Boris N. Yeltsin had weakened since the 
Russian leader's show of solidarity with the Baltic states in Janu- 
ary 1991. Issues surrounding Russian troop withdrawals from 
the Baltic republics and Estonia's denial of automatic citizen- 
ship to noncitizens ranked high on the list of points of conten- 
tion. Immediately after independence, Estonia began pressing 
the Soviet Union, and later Russia, for a speedy withdrawal of 
Soviet troops from its territory. Estonia insisted that the process 
be completed by the end of the year. The Soviet government, 
citing a lack of available housing for its troops, said not before 
1994. In January 1992, some 25,000 troops were reported left 
in Estonia, the smallest contingent in the Baltic states. Still, 
more than 80,000 hectares of land, including an inland artil- 
lery range, remained in the Russian military's hands. More 
than 150 battle tanks, 300 armored vehicles, and 163 battle air- 
craft also remained. The last troops did not leave until August 
1994. 

In the fall of 1991, as Estonia laid down its new citizenship 
policy, the Soviet Union called the move a violation of human 
rights. Under the citizenship policy, most of the country's large 
ethnic Russian minority were declared noncitizens. The Soviet 
government linked the further withdrawal of troops from Esto- 
nia to a satisfactory change in Estonia's citizenship stance. In 
response, Estonia denied the human rights charges and invited 
more than a dozen international fact-finding groups to visit the 
country for verification. As the propaganda war and negotia- 



74 



Estonia 



tions dragged on, Estonia and the other two Baltic countries 
gained international support for their position on troop with- 
drawal at ajuly 1992 summit of the CSCE in Helsinki. The final 
communique called on Russia to act "without delay . . . for the 
early, orderly and complete withdrawal" of foreign troops from 
the Baltic states. Resolutions also were passed in the United 
States Senate in 1992 and 1993 linking the issue of troop with- 
drawals to continued United States aid to Russia. 

Yet, Estonian and Russian negotiators remained deadlocked 
throughout 1993. At several points, President Yeltsin and other 
Russian officials called an official halt to the pullout, but the 
unofficial withdrawal of forces continued. By the end of 1992, 
about 16,000 troops remained. A year later, that number was 
down to fewer than 3,500, and more than half of the army out- 
posts had been turned over to Estonian defense officials. The 
Estonian and Russian sides continued to disagree, primarily 
over the pace of Russia's withdrawal from the town of Paldiski, 
on the northern coast some thirty-five kilometers west of 
Tallinn. The Soviet navy had built a submarine base there that 
included two nuclear submarine training reactors. Russian offi- 
cials maintained that dismantling the reactor facility would 
take time; Estonia demanded faster action along with interna- 
tional supervision of the process. The last Russian warship, car- 
rying ten T-72 tanks, departed in August 1994. However, 
Russia was to retain control of the reactor facility in Paldiski 
until September 1995. 

Territorial issues also clouded Estonian-Russian relations. 
Estonia continued to stick by its demand for the return of more 
than 2,000 square kilometers of territory annexed to Russia by 
Stalin in 1945. The annexed land was within the borders Esto- 
nia and Russia had originally agreed to as part of the 1920 
Tartu Peace Treaty. However, the Yeltsin government dis- 
avowed any responsibility for acts committed by the Soviet 
regime. 

National Security 

Although the ultimate goal of ensuring protection against 
an outside attack appeared remote, Estonia was hard at work 
building up a defense force in the mid-1990s, with plenty of 
outside help. The most dramatic step the country took was the 
appointment in May 1993 of Aleksander Einseln, a retired 
United States Army colonel and emigre Estonian, to command 
Estonia's fledgling armed forces. The decision drew strong 



75 



Estonia, Latvia, and Lithuania: Country Studies 

objections from the United States Department of State, which 
feared upsetting Russia by allowing former United States mili- 
tary personnel to serve in high posts in the former Soviet 
Union. The United States threatened to revoke Einseln's mili- 
tary pension and even his citizenship. Support for the new 
Estonian general from several United States senators, however, 
helped ease the controversy. 

Armed Forces 

f 

'] The armed forces in 1994 numbered about 3,000, including 
a 2,500-member army and a 500-member navy. There were also 
a 6,000-member reserve militia, known as the Defense League 
(Kaitseliit) ; a 2,000-member paramilitary border guard under 
the command of the Ministry of Interior; and a maritime bor- 
der guard, which also functioned as a coast guard. The army's 
equipment included eight Mi-8 transport helicopters. The 
navy possessed two former Soviet and four former Swedish 
patrol craft, as well as two small transport vessels. The govern- 
ment allocated some EKR250 million for defense in 1994. 

The armed forces of which Einseln took command offered 
no shortage of work. Serious divisions existed between several 
commanding officers, including the army chief of staff, who 
had received their training in the Soviet military and younger 
officers and recruits who distrusted leaders who had served in 
the "Soviet occupation army." The appointment of an outsider 
as commander was meant to close this rift, but the antipathies 
remained strong. 

Especially independent minded was the Defense League, a 
patriotic volunteer group from the interwar years that was 
revived in early 1990. The league staged several attention-grab- 
bing maneuvers in 1990 (including an attempt to place border 
posts along Estonia's prewar frontier, now in Russia), which 
often drew criticism as being provocative. After independence 
the Defense League refused to merge with Estonia's budding 
army, preferring to remain a separate auxiliary force. 

In July 1993, Estonia saw the dissension within the army 
erupt into a minor mutiny among a group of several dozen 
recruits serving in Pullapaa in western Estonia. The unit was 
upset over poor treatment during a mission in which it had 
been ordered to take control of parts of the former Russian 
military town of Paldiski. In protest, members of the group 
declared their intention to leave the Estonian army and devote 
their efforts to fighting organized crime. The Estonian govern- 



76 



Estonia 



ment ordered the dissolution of the unit but eventually backed 
down. Hain Rebas resigned as defense minister over the gov- 
ernment's inaction while also claiming an inability to work with 
some of the army's Soviet-trained commanders. The leaders of 
the infantry unit went free until their capture in November fol- 
lowing a shoot-out with police. 

More outside help in improving Estonia's armed forces came 
with the purchase in January 1993 of more than US$60 million 
in Israeli light arms. The contract, signed by the government in 
private talks with TAAS-Israel Industries, later caused a political' 
storm when many deputies in parliament questioned whether 
Estonia had gotten a fair deal. The government nevertheless 
convinced the Riigikogu in December to ratify the agreement. 
While increasing the army's firepower, part of the weaponry 
was also to go to Estonia's border guard. 

Estonia's Nordic neighbors also were active in building up 
the country's defenses. Finland, Sweden, and Germany all 
donated patrol boats, uniforms, and small transport aircraft to 
equip the new soldiers. No arms sales, however, were consid- 
ered. 

In 1990 Estonia had been the first Soviet republic to defy the 
Soviet army by offering alternative service to Estonian residents 
scheduled to be drafted. Most Estonians, however, simply 
began avoiding the draft. After independence, Estonia insti- 
tuted its own compulsory military service, with a minimum 
term of one year beginning at age eighteen. About 12,000 
males reach the age of eighteen every year. Young Estonian 
men continue to spurn the call, however; only one-third of eli- 
gible draftees turned out for the spring 1993 conscription. In 
addition, the Estonian military faces a limited pool from which 
to choose because only citizens can be drafted and because 
restrictions have been placed on the induction of university stu- 
dents. 

Estonia's security strategy was dubbed by one observer in 
1993 as the "CNN defense." Ideally, Estonia would attempt to 
delay a presumed Russian invasion until it could draw interna- 
tional attention and at least diplomatic intervention. As in the 
case of Poland and the Czech Republic, talks with NATO about 
extending Western security guarantees to the Baltic area did 
not meet with ready success. Still, the Nordic countries seem 
intent on improving Baltic defense arrangements, in part to 
bolster their own regional security. Another gambit is Estonia's 
strengthening of relations with Ukraine. 



77 



Estonia, Latvia, and Lithuania: Country Studies 

Crime and Law Enforcement 

The number of reported crimes in Estonia rose to 41,254 in 
1992, an increase of 250 percent over 1987. The overwhelming 
majority represented cases of theft (33,128). In Tallinn, where 
many residents had begun traveling to the West and acquiring 
Western goods, apartment break-ins accounted for 31 percent 
of all thefts. Street crime also mounted, especially in the capi- 
tal. In 1992 the number of murders or attempted murders 
climbed 75 percent, to 239. In 1993 that total was equaled in 
only nine months. Meanwhile, only 21 percent of all crimes 
were being solved as of mid-1993. 

Organized crime is a major worry for law enforcement offi- 
cials. Various groups originating in Russia are believed to be 
operating in Estonia, conducting illicit trade and exacting pro- 
tection money from new shops and restaurants. A major black 
market in copper and other nonferrous metals developed in 
1992, when lax export controls and high trading prices encour- 
aged the theft of copper communications wire, monument 
plaques, and even graveyard crosses. Losses in 1992 were esti- 
mated at nearly EKR10 million. The spread of prostitution 
beyond hotel lobbies into fully operating brothels prompted 
some officials in 1993 to call for its legalization to gain at least 
some control over the situation. 

Popular frustration at the growth in crime focused in 1993 
on the interior minister, Lagle Parek. A prominent dissident 
during the Soviet era, she had become head of the Estonian 
National Independence Party, one of the three parties in the 
governing coalition. She was unable, however, to shake up the 
ministry that had once kept tabs on her protest activities, and 
she was forced to resign. 

The penal code introduced in 1992 retained the death pen- 
alty for terrorism and murder. In 1993 two persons were sen- 
tenced to death for aggravated murder. In August 1993, about 
4,500 persons were in custody in the country's eleven prisons. 

Outlook 

As Estonia entered its fourth year of independence, it had 
already built a strong record of achievements. In the midst of 
the August 1991 coup, Estonia's politicians had had the fore- 
sight to convene a constitutional assembly and seize the 
moment for political restructuring. The process of constitution 
making was completed in a relatively orderly manner, and the 



78 



Estonia 



new basic law was successfully implemented. Lasting political 
parties had yet to develop, however. Half a decade after open 
parliamentary politics began with the Supreme Soviet elections 
of 1990, the factions in parliament continued to fragment and 
regroup. Part of Estonia's problem may have been its small size. 
Because the circle of politicians was not very large in a country 
of only about 1.5 million people, there was relatively little turn- 
over, and old rivals and allies were constantly pitted against 
each other. The first era of independence had witnessed the 
same problem. Yet, Estonia's decision to stick to a parliamen- 
tary system of government in 1992 appeared to be a good one, 
even though it was the same system that had been the undoing 
of the country's first democracy in 1934. More safeguards had 
been built into the 1992 constitution against parliamentary 
domination of politics. Lennart Meri's tenure as Estonia's first 
postwar president appeared to mold the new office into a 
source of balance, despite grumblings from his Isamaa backers. 
A new court system was also put into place, with effective use 
being made of provisions for testing the constitutionality of 
laws. 

Yet, politics did not reach the lives of all of Estonia's resi- 
dents. Having been left out of the parliamentary elections in 
1992 because of citizenship requirements, Estonia's large Rus- 
sophone population was virtually absent from national politics. 
Russians dominated in the city councils of the heavily Russian 
towns of Narva and Sillamae, in the northeastern part of the 
country, but their political presence rarely extended beyond 
the city limits. Even a last-ditch local referendum on territorial 
autonomy for the northeastern region, declared in July 1993 in 
response to the Law on Aliens crisis, largely failed because of 
numerous reports of voting irregularities. Most of these Rus- 
sian leaders — who had long histories as communist party func- 
tionaries, who had tacitly supported the August 1991 coup, and 
who had held on to their political turf since then — finally were 
ousted in the local elections of October 1993. A new core of 
Russian leaders began to emerge in Tallinn, where two Russian- 
based parties did well at the polls and were poised to play an 
important role in the capital's city council. From that point, a 
responsive mainstream political society could begin to serve a 
Russian population that seems determined to remain in Esto- 
nia and willing to contribute to its future. 

The progress of Estonia's economic reforms in the early 
1990s, if only in comparison with Russia, was clearly a source of 



79 



Estonia, Latvia, and Lithuania: Country Studies 

confidence among both Estonians and Russians in the future 
of the country. Estonia was the first of the Baltic states to jump 
out of the ruble zone and create its own currency, a move that 
was soon rewarded by low inflation, rising wages, and an appar- 
ent bottoming out of the country's economic decline. Never- 
theless, a large section of the population continued to fear 
unemployment. Retraining for new skills needed on the open 
market (such as learning the Estonian language for many Rus- 
sians) also was a pressing need. The growing gap between the 
newly rich and the newly poor could be seen in the comparison 
between new Western luxury automobiles racing around 
Tallinn's streets and pensioners counting their kroons at a 
store to buy a half-kilogram of meat. For better or worse, the 
transition to capitalism was reordering society. 

Estonia was not alone on its long road to recovery nor in its 
return to the European community of nations. Yet, even 
among so many countries with a kindred past and a common 
desire for a better future, the hoped-for dawning of a new geo- 
political age did not appear to have taken place by the mid- 
1990s. Estonia and the other Baltic states remained of strategic 
interest to the Kremlin, and the West appeared to have little 
intention of crossing Russia on its very doorstep. European, 
and especially Scandinavian, support for Estonia's defense 
forces was noticeable. But it would take a long time before a 
credible Estonian force could be assembled. Although the Rus- 
sian troops had finally departed, full security for Estonia 
seemed to remain distant. 

* * * 

The two most comprehensive works on Estonia are Rein 
Taagepera's Estonia: Return to Independence and Toivo V. Raun's 
Estonia and the Estonians. Both contain complete overviews of 
Estonian history, including the most recent struggle for inde- 
pendence. Tonu Parming's small book on the interwar years, 
The Collapse of Liberal Democracy and the Rise of Authoritarianism in 
Estonia, provides an extended analysis of that period. Ot dogo- 
vora o bazakh do anneksii: Dokumenty i materialy, a collection of 
documents edited by Juri Ant et al. that pertain to the Nazi- 
Soviet Nonaggression Pact and to Estonia's annexation by the 
Soviet Union, dramatizes the fateful end of Estonia's first era of 
independence. 



SO 



Estonia 



The World Bank's extensive survey of the Estonian economy 
is an excellent source of economic and social statistics up to 
1991-92. For later statistics reflecting the introduction of the 
kroon, as well as social trends under the market economy, the 
Estonian State Statistics Board has issued a statistical yearbook 
regularly since 1991. 

Other useful sources on Estonia can be found in several gen- 
eral works on the Baltic states. Anatol Lieven's The Baltic Revolu- 
tion is an incisive look at the politics of independence from an 
outsider's point of view Lieven includes discussion of Estonia's 
Russian minority and its future. Graham Smith's The Baltic 
States: The National Self-Determination of Estonia, Latvia, and 
Lithuania also treats Estonia extensively. (For further informa- 
tion and complete citations, see Bibliography.) 



81 



Chapter 2. Latvia 



Tower of the Dome Cathedral, Riga 



Country Profile 



Country 

Formal Name: Republic of Latvia (Latvijas Republika). 
Short Form: Latvia (Latvija). 
Term for Citizen(s): Latvian(s). 
Capital: Riga. 

Date of Independence: During abortive Soviet coup, declared 
immediate full independence August 21, 1991; Soviet Union 
recognized it September 6, 1991. November 18, Independence 
Day, national holiday; on this day in 1918, independent 
Republic of Latvia proclaimed. 

Geography 

Size: 64,589 square kilometers, slightly larger than West 
Virginia. 

Topography: Undulating plains cover 75 percent of country. 
Forest 42 percent; cultivable land 27 percent; meadows and 
pastur eland 13 percent; peat bog, swamp, and marsh 10 
percent; and other 8 percent. Highest elevation 300 meters. 

Climate: Temperate, with mild winters and cool summers. 
Average January temperatures range from -2.8°C in Liepaja to 
-6.6°C in Daugavpils; average July temperatures range from 
16.7°C in Liepaja to 17.6°C in Daugavpils. Frequent precipita- 
tion, averaging 180 days per year in Riga. Annual precipitation 
500 to 700 millimeters. 

Society 

Population: 2,565,854 (1994 estimate). Population declined in 
early 1990s because of negative natural growth rates and net 
out-migration. Birth rate 9.5 births per 1,000 population; death 



85 



Estonia, Latvia, and Lithuania: Country Studies 

rate 16.3 deaths per 1,000 population (1994). Total fertility 
rate 2.0 children per woman (1993). Population density 39.7 
persons per square kilometer. Average life expectancy 
estimated in 1994 at 69.4 years (64.4 years for males and 74.8 
years for females) . 

Ethnic Groups: According to the 1989 census, Latvians 52.0 
percent, Russians 34.0 percent, Belorussians 4.5 percent, 
Ukrainians 3.4 percent, Poles 2.3 percent, Lithuanians 1.3 
percent, and others (including Jews, Germans, Estonians, 
Tatars, and Gypsies) 2.5 percent. In 1994 estimates of Latvian 
and Russian groups 54.2 percent and 33.1 percent, respectively. 

Languages: Official language Latvian; Russian, Belarusian, 
Ukrainian, Polish, Lithuanian, and other languages also used. 

Religion: Mostly Evangelical Lutheran; Roman Catholics, 
Orthodox Christians, Old Believers, Baptists, Pentecostals, 
Seventh-Day Adventists, Jews, and Methodists also represented. 

Education: Latvian adopted as official state language in 1989, 
making its study compulsory for all students. Nine years of 
primary education compulsory; may be followed by three years 
of secondary education or one to six years in technical, 
vocational, or art schools. In 1993-94 school year, total of 
76,619 students enrolled in primary schools, 242,677 in 
secondary schools, 27,881 in vocational schools, 19,476 in 
special secondary institutions, and 7,211 in special schools for 
physically and mentally handicapped. Literacy rate close to 100 
percent. 

Health and Welfare: In 1992 some 176 hospitals and 130 beds 
per 10,000 inhabitants. Most hospitals lacked modern facilities 
and were concentrated in urban areas. Forty-one physicians per 
10,000 inhabitants, but too few nurses and other auxiliary staff. 
Retirement pensions LVL15 to LVL23.5 per month; many 
pensions awarded also to survivors and disabled persons. 

Labor Force: 1,407,000 (August 1994); industry 30 percent; 
agriculture 16 percent; trade 9 percent; transportation and 
communications 9 percent; construction 10 percent; and 
financial services and other 27 percent. Distribution of 



86 



Latvia 



economic sectors began to shift away from industry and toward 
services in early 1990s. 

Economy 

Gross National Product (GNP): Estimated at US$5.1 billion in 
1992; per capita income US$4,810 (1993 estimate). Gross 
domestic product (GDP) increased from LVL1.6 billion in 
1993 to an estimated LVL2.2 billion in 1994. Real GDP fell 33.8 
percent in 1992 and 11.7 percent in 1993, but grew an 
estimated 2.0 percent in 1994. Inflation rate averaged less than 
3 percent per month in 1993 and less than 2.4 percent per 
month in 1994; annual inflation rate decreased from more 
than 958 percent in 1992 to 35 percent in 1993 and 28 percent 
in 1994. 

Agriculture: Supplanted by industry as foremost economic 
sector in postwar era. Aggressive capital formation and forced 
labor movements under Soviet rule reduced agriculture's share 
of labor force from 66 percent in 1930 to about 16 percent in 
1990. Accounted for 20 percent of GDP in 1990 and 15 percent 
of GDP in 1994. Livestock main subsector. Nearly 1.7 million 
hectares of arable land, used mainly for growing fodder crops 
and grain. Number of private farms increased from nearly 
4,000 in 1989 to more than 57,500 in 1993. 

Industry and Mining: Foremost economic sector during Soviet 
period; employed more than 30 percent of labor force in 1990. 
Supplanted by services subsequently; share of GDP declined 
from about 43 percent in 1990 to 22 percent in 1994. 
Production declined sharply in 1992 and 1993. Highly 
dependent on energy and raw material imports. Main 
industries engineering (including machine building and 
electronics), textiles, food, wood and paper, chemicals, and 
building materials. 

Energy: Relies heavily on imports of fuels and electric power. 
Energy generated domestically by three hydroelectric power 
plants on Daugava River and two thermal power plants near 
Riga. 

Exports: LVL701.6 million (1993 estimate). Major commodi- 



87 



Estonia, Latvia, and Lithuania: Country Studies 

ties oil products, wood and timber, food products, metals, and 
buses. 

Imports: LVL647.4 million (1993 estimate). Major commodi- 
ties oil, natural gas, machinery, electric power, and automo- 
biles. 

Major Trading Partners: Russia, Germany, Ukraine, Sweden, 
Belarus, Netherlands, Estonia, Finland, Lithuania, and Britain. 

Currency and Exchange Rate: 1 lats (LVL) = 100 santims. Lats 
reintroduced in March 1993, replacing Latvian ruble in 
October 1993 at rate of 1 lats = 200 Latvian rubles. In March 
1996, LVL0.55 = US$1. 

Fiscal Year: Calendar year. 

Transportation and Telecommunications 

Roads: 64,693 kilometers total, of which 7,036 kilometers 
highways and 13,502 kilometers secondary roads (1994). Bus 
service between Riga and Warsaw. Urban centers also served by 
minibuses and taxis. Rental automobiles available. 

Railroads: 2,406 kilometers of railroads, of which 270 kilo- 
meters electrified (1992). Train service available to Moscow, St. 
Petersburg, and Warsaw. 

Civil Aviation: Main airport in Riga. Regular flights to many 
international destinations, including Amsterdam, Berlin, 
Copenhagen, Frankfurt, Kiev, Helsinki, London, Moscow, Oslo, 
St. Petersburg, and Stockholm. National carrier Latvian 
Airlines. Service also provided by Baltic International Airlines, 
Riga Airlines Express, Finnair, Lufthansa, SAS (Scandinavian 
Airlines), Estonian Air, and LOT (Polish Airlines). 

Shipping: Main coastal ports Riga, Ventspils, and Liepaja, a 
former Soviet naval port. Main inland port Daugavpils. Most 
Russian petroleum exports pass through Ventspils (16.3 million 
tons in 1993). Total freight transported through Latvian ports 
in 1993 about 27.2 million tons. Shipping service exists 
between Riga and Western Europe. 



88 



Latvia 



Telecommunications: In 1992 about 700,000 telephone 
subscribers (more than 50 percent in Riga); nearly 1.4 million 
radio receivers and more than 1.1 million television receivers 
in use. In 1995 more than twenty-five radio stations and thirty 
television broadcasting companies. 

Government and Politics 

Government: Parliamentary democracy. Electoral system based 
on that existing before Soviet annexation; 1922 constitution 
restored in 1993. Saeima, supreme legislative body, composed 
of 100 members elected on basis of proportional represen- 
tation. Saeima elects president (head of state), who appoints 
prime minister. Cabinet of Ministers, headed by prime min- 
ister, has executive power. 

Judicial System: Inherited from Soviet regime; undergoing 
reorganization. Regional, district, and administrative courts, as 
well as Supreme Court. Final appeals in criminal and civil cases 
made to Supreme Court. 

Politics: Parties include Latvia's Way (Latvijas Cels), centrist in 
orientation; Democratic Party Saimnieks, center-left; Latvian 
National Independence Movement; Popular Front of Latvia; 
For Latvia, far-right; Latvian Farmers Union; Christian Demo- 
cratic Union; National Union of Economists; and Ravnopraviye 
(Equal Rights Movement), a Russophone group. 

Administrative Divisions: Four provinces: Vidzeme, Latgale, 
Kurzeme, and Zemgale; subdivided into twenty-six districts, 
seven municipalities, fifty-six towns, and thirty-seven urban 
settlements. 

Foreign Relations: Latvia joined United Nations (UN) in 
September 1991 and is a signatory to a number of UN 
organizations and other international agreements. Member of 
Organization for Security and Cooperation in Europe (until 
January 1995 known as Conference on Security and 
Cooperation in Europe), North Atlantic Cooperation Council, 
and Council of the Baltic Sea States. In February 1994, Latvia 
joined Partnership for Peace program of North Atlantic Treaty 
Organization. Some improvement in relations with Russia after 



89 



Estonia, Latvia, and Lithuania: Country Studies 

Russian troop withdrawal in August 1994. 
National Security 

Armed Forces: Based on Swedish-Finnish rapid response force 
model. In 1994 armed forces totaled 6,600, including 1,650 in 
army, 630 in navy, 180 in air force, and 4,140 in border guard. 
Plans call for 9,000 active members in armed forces. Additional 
forces include security service of Ministry of Interior and 
reserve Home Guard (Zemessardze), latter organization 
having an estimated 17,000 members. Mandatory one-year 
period of active duty for men at age nineteen. Alternative 
service available for conscientious objectors. 

Military Budget: About US$48 million allocated to defense in 
1993. 



90 



21 



International boundary 

® National capital 
• Populated place 



25 50 Kilometers 



\ 2* 



ESTONIA 



, /0/a . ^ S ^ N 




7\ 

\<Peipsi \ 
1 \ 



# *Strenci 

Valmiera Aluksne 



^ j RUSSIA 



Ces;s 



Gulbene i 



i Erg// 



S/cr/Veri ^pi av i na s LvBonos 

,g> Tzers 
Jekabpiism 2 ^^ 



Karsa 



LITHUANIA 



Rezekne • 

Keznas^ ) 
Tzers 

X Daugavpils^ 5 ' 3 ^' 
\ • • 



RUSSIA 



Boundary representation 
24 nof necessarily authoritative 



( ^ BELARUS 



Figure 7. Latvia, 1995 



92 



AMONG THE BALTIC STATES, Latvia lies "in the middle," not 
merely geographically but also in a cultural sense. It has been 
suggested that average Estonians are cool, rational, and some- 
what aloof, whereas Lithuanians are warm, emotional, and gre- 
garious. Latvians incorporate a mixture of these traits. 
Although they have much in common with Estonians and 
Lithuanians, on most questions — whether in economics, poli- 
tics, or social policies — the Latvian people have chosen a 
slightly different path of development. 

There is a widespread perception that Latvia is a "tiny" coun- 
try. Its actual size, however, surprises most first-time travelers. It 
is only slightly smaller than Ireland and is larger than many 
other European countries, such as the Netherlands, Switzer- 
land, Belgium, and Denmark. Its significant contribution to 
history, especially in the dissolution of the tsarist and Soviet 
empires, belies its comparatively limited geographical dimen- 
sions beside its giant and unpredictable neighbor to the east. 

Latvia was occupied by the Soviet Union for half a century. 
This occupation has left serious demographic, economic, and 
psychological legacies, whose burdens will be borne by the 
inhabitants of Latvia for the foreseeable future. In spite of 
these burdens, however, Latvia and the other two Baltic repub- 
lics have made greater progress toward Westernization than 
any of the other former Soviet republics. 

Historical Setting 
Early History 

Latvians have resided in their present geographical area for 
more than 2,000 years. Their closest ethnic relatives are the 
ancient Prussians, the Galinds, the Jatvings, and the Lithua- 
nians. Only the Lithuanians have avoided extinction. All the 
other peoples were conquered or assimilated by their neigh- 
bors, demonstrating one of the realities of history — the ebb 
and flow of the creation and disappearance of nations. This 
aspect of history has been taken to heart by Latvians, who regu- 
larly use their experience of extinction as a tocsin of potential 
danger to the survival of their own group. Ironically, Latvians 
themselves have been in the position of having assimilated 
another group. The first settlers in the territory of Latvia were 



93 



Estonia, Latvia, and Lithuania: Country Studies 

Livonians, or "Libiesi." Whereas the Latvians originated from 
the Indo-European family, the Livonians were akin to the Esto- 
nians and the Finns and formed a part of the Finno-Ugric com- 
plex of nations. The Livonians were once heavily concentrated 
in the northern part of Latvia's present-day provinces of 
Kurzeme and Vidzeme, but today only about 100 individuals 
retain their ancient language. Livonians have also contributed 
to the development of a prominent Latvian dialect. 

Until about 1300, the Latvian people lived within half a 
dozen or so independent and culturally distinct kingdoms. This 
lack of unity hastened their conquest by German-led crusaders, 
who brought with them more efficient weaponry, war experi- 
ence, and technology, including stone and mortar fortifica- 
tions. During the next 600 years, various parts of the territory 
of Latvia were taken over by a succession of foreign regimes, 
including those of Denmark, Prussia, the Polish-Lithuanian 
Commonwealth, Sweden, and Russia. In this maelstrom of 
changing rulers, the descendants of the German conquerors 
were able to maintain their autonomy and their title to feudal 
estates by adapting to new circumstances and by offering loy- 
alty to whoever was the dominant power. These Baltic barons 
formed the bulk of the upper classes and set the tone of the 
Baltic establishment. Although their dominance over the 
Latvian serfs has often been justifiably criticized, their pro- 
found impact on Latvian cultural and social development can 
be observed even to this day. 

Besides the Baltic barons and other Germans, the greatest 
impact on the formation of the Latvian nation came from Rus- 
sia, the giant neighbor that began the conquest of Latvia in 
1710 under Peter I (the Great) (r. 1682-1725) and completed 
the process eighty-five years later. For more than 200 years, 
Latvians had a unique mixture of elites. The German nobility 
was dominant in economic, cultural, social, and local political 
life, and the Russian bureaucracy was in charge of higher poli- 
tics and administration. Some Latvians aspiring to higher status 
tried to emulate the Germans, but other Latvians thought that 
salvation was to be found with the Russians. Indeed, a large 
part of the Latvian intelligentsia was inspired by alumni of the 
higher educational institutes of St. Petersburg. Several promi- 
nent intellectual leaders agitated for the migration of Latvians 
to the interior of Russia, where free land was available. Some 
Latvians adopted the Orthodox faith, Russia's predominant 
religion. 



94 



Latvia 



During the second half of the nineteenth century, Latvians 
experienced a resurgence of national consciousness. There was 
an intense development of Latvian culture and a new stress on 
the need for protecting this culture against the inroads of both 
Germanization and Russification. A new Latvian-oriented elite 
appeared and began to press for a larger input by Latvians in 
the determination of their own local affairs. This period is 
known as the first Latvian awakening. 

The favorable geographical position of Latvia alongside the 
Baltic Sea and on the outer frontier of a vast, mostly landlocked 
Russian Empire provided the impetus for an extremely rapid 
economic development of the region. The most rapid growth 
occurred between 1880 and World War I. Riga became the 
third largest port in the Russian Empire; in 1913 its port had a 
larger trade turnover than St. Petersburg's. Many huge facto- 
ries were constructed, attracting great masses of new workers 
from the Latvian countryside and from the interior of Russia. 

Working-class discontent and the spread of Marxism created 
a volatile situation in Latvia. This radicalism was exacerbated by 
the shooting of seventy peaceful demonstrators in Riga in Janu- 
ary 1905. Massive strikes by workers and the uprising of peas- 
ants with the attendant burning of feudal manor houses 
resulted in a very vindictive reaction by authorities, who shot 
some 3,000 people and sent many into exile in Siberia. Others 
managed to flee abroad. In 1905 almost all segments of Latvian 
society were united in their anger against the Russian authori- 
ties and the German barons. 

This legacy of 1905, together with the disruption of World 
War I, when half the Latvian population was forced to evacuate 
ahead of the invading Germans, created propitious conditions 
for the growth of Marxism and especially its radical variant, 
Bolshevism. Of the votes for the All-Russian Constitutional 
Assembly from Latvians in the Russian-controlled northeastern 
part of Latvia, the Bolsheviks received a majority (71.9 per- 
cent). By contrast, in the entire empire less than a quarter 
voted for the Bolsheviks. 

This infatuation with Bolshevism suffered a severe jolt, and 
support plummeted dramatically, during the half-year of Bol- 
shevik rule of Latvia, which ended in May 1919. Nevertheless, a 
significant contingent of Latvian Red Riflemen fled to Russia, 
where they formed an important part of the leadership and 
infrastructure of the Red Army. Many Latvians also became 
prominent in the top hierarchy of the first Soviet political 



95 



Estonia, Latvia, and Lithuania: Country Studies 

police, known as the Cheka (see Glossary), and the Russian 
Communist Party (Bolshevik). Their days of glory were cut 
short by the mass executions initiated by Joseph V. Stalin in the 
1930s. 

Independence, 1918-40 

Latvian independence was proclaimed on November 18, 
1918, but its real advent came only in 1920 after the cessation 
of hostilities between pro- and anti-Bolshevik forces and the 
withdrawal of all foreign armies from Latvian territory. The 
peace treaty signed with Soviet Russia on August 11, 1920, was a 
critical step. As stated in Article 2 of this treaty, "Russia unre- 
servedly recognizes the independence and sovereignty of the 
Latvian State and voluntarily and forever renounces all sover- 
eign rights over the Latvian people and territory." Latvia 
became a member of the League of Nations in 1921. 

Latvia's ensuing period of independence lasted for twenty 
years and has become embedded in the Latvian consciousness 
as a golden era of progress and achievement, now referred to 
as the second awakening. The period of independence was 
characterized by both economic viability and political instabil- 
ity. The Latvian currency, the lats, became relatively stable. 
Farming and exports flourished. Inflation was low. Welfare pro- 
visions were generous. Foreign debt was minimal. One of the 
more important indexes of economic achievement was the vol- 
ume of gold — 10.6 tons — that the Latvian government placed 
for safekeeping in the United States, Britain, France, and Swit- 
zerland.This period is also important in understanding a signif- 
icant thread of present-day Latvian political culture. The state 
intervened as a direct economic actor in many areas, including 
heavy industry, building materials, electricity, tobacco, brewing, 
confectionery, textiles, insurance, and food processing. The 
government also made a conscious attempt to provide stability 
and, even more important, to help expand Latvian control of 
the economy. 

Until 1934 Latvia had a system of democracy similar to that 
in Weimar Germany (1919-33). The use of proportional elec- 
tions and the absence of any dominant party encouraged par- 
ticipation by more than forty different political parties. The 
1931 parliament (Saeima) had representatives from twenty- 
seven parties. It is not surprising, then, that Latvia had eigh- 
teen different parliamentary governments with new combina- 
tions of coalition partners in fewer than fourteen years. The 



96 



Latvia 



evident political instability and the threat of a coup d'etat from 
both the left and the right encouraged Karlis Ulmanis, a cen- 
trist, to take the reins of power into his own hands in May 1934. 
Ulmanis had been one of the founders of independent Latvia 
and had also been prime minister several times. His acknowl- 
edged experience and the public's general disgust with poli- 
ticking assured little protest against the "setting aside" of 
Latvia's constitution. 

Ulmanis was a populist ruler who did not countenance 
opposition. He banned all parties and many press organs. It is 
important to note, however, that not a single person was exe- 
cuted during this period, although several hundred activists 
from the left and right were incarcerated for brief periods of 
time. Ulmanis tried to maintain a neutral stance between the 
Soviet Union and Nazi Germany, but his best efforts failed 
when these two totalitarian systems connived to carve out 
spheres of dominance in the heart of Europe. 

Ulmanis was deported by the Soviet authorities and died in 
captivity in Russia in 1942, but his legacy remains alive in 
Latvia. Today, Ulmanis is a powerful symbol of selfless dedica- 
tion to Latvia, and his memory is honored even by organiza- 
tions with high concentrations of former communists. These 
groups realize that the once-vilified dictator has tremendous 
appeal among Latvians, especially in rural areas, and that their 
association with Ulmanis can provide long-term political divi- 
dends. At the same time, the historical experience of such a 
dictatorship, even if beneficial in some respects, has been used 
in debates as a warning against a repetition of dictatorial rule. 

The fate of Latvia and the other Baltic republics was sealed 
on August 23, 1939, when the foreign ministers of the Soviet 
Union and Nazi Germany, Vyacheslav Molotov and Joachim 
von Ribbentrop, respectively, signed a secret protocol giving 
Estonia and Latvia to the Soviet Union and Lithuania to Ger- 
many. Within five weeks, however, Lithuania was added to the 
Soviet roster of potential possessions in exchange for other ter- 
ritories and sizable sums of gold. 

The Nazi-Soviet Nonaggression Pact (also known as the 
Molotov-Ribbentrop Pact) was not acknowledged by the Soviet 
Union until it was forced to do so, fifty years later, by the Baltic 
delegation to the Congress of People's Deputies (see Glossary) 
in Moscow in 1989. The pact was seen by Latvian and other Bal- 
tic independence supporters as the Achilles' heel of the care- 
fully constructed myth by Moscow propagandists of how the 



97 



Estonia, Latvia, and Lithuania: Country Studies 

Baltic countries had joyfully embraced the Soviet Union and 
had voted to become new Soviet republics. Indeed, the Latvian 
dissident group known as Helsinki '86 had organized demon- 
strations on August 23, 1987, to underscore the secret pact's 
existence. These demonstrations had reverberated throughout 
the world and had put Soviet leader Mikhail S. Gorbachev's 
regime on the defensive. 

For the Baltic countries, the half-century following the 1939 
pact was a particularly tragic time. During that period, hun- 
dreds of thousands of people perished, and much effort was 
expended to obliterate the memory of independence. 

On October 5, 1939, soon after the Nazi-Soviet Nonagres- 
sion Pact was signed, the Soviet Union coerced Latvia into sign- 
ing the Pact of Defense and Mutual Assistance. It then forced 
Latvia to accept occupation by 30,000 Soviet troops. Similar 
treaties were imposed on Estonia and Lithuania, whose forces 
also were vastly outnumbered by Soviet forces. (The Baltic 
states' northern neighbor, Finland, refused to accept such a 
demand, however, and, after it was attacked on November 30, 
1939, valiantly fought the Red Army in what became known as 
the Winter War. The Soviet Union was expelled from the 
League of Nations for this unprovoked attack on Finland.) 

Stalin made his next move in the Baltics when world atten- 
tion was riveted on the imminent surrender of France to the 
Nazis in June 1940. An ultimatum was sent to each one of the 
Baltic countries demanding replacement of their existing gov- 
ernments by those capable of ensuring the proper fulfillment 
of the previously signed pacts of mutual assistance. Moscow 
also demanded the free entry of unlimited troops to secure 
strategic centers. With no hope of external support, all three 
countries capitulated to these demands. 

The Soviet Period 

The new Soviet troops moved into Latvia, together with a 
special emissary, Andrey Vyshinskiy, who was entrusted with the 
details of mobilizing enthusiastic mass support for the Soviet- 
ization of Latvia. Vyshinskiy had learned political choreogra- 
phy well when he staged the infamous Moscow show trials 
against the theoretician Nikolay I. Bukharin and other enemies 
of Stalin. 

A so-called "people's government" was assembled, and elec- 
tions were held to help legitimate the changes in the eyes of 
the world. Only the communist slate of candidates was allowed 



98 



Flowers laid at base of Liberty 
Monument in Riga 
Courtesy Linda Sudmalis 



Candles line roads connecting 
the three Baltic capital cities 
on the anniversary of the 
Nazi-Soviet Nonaggression 
Pact (1939), Riga, 1991. 
Courtesy Linda Sudmalis 




99 



Estonia, Latvia, and Lithuania: Country Studies 

on the ballot, and the improbable result of 97.6 percent in 
favor — with a more than 90 percent turnout — was never found 
to be credible by any of the Western governments. For the pur- 
poses of Soviet strategy and mythmaking, however, they suf- 
ficed. On July 21, 1940, the newly elected delegates proclaimed 
the Latvian Soviet Socialist Republic and voted to petition the 
Soviet Union to allow Latvia to join as a constituent republic. 
Not surprisingly, their wishes were granted. The process of 
Sovietizing Latvia was interrupted, however, when Stalin's ally 
and co-conspirator attacked the Soviet Union on June 22, 1941. 
One week before the Nazi attack, the Soviet regime had 
arrested and deported to Siberia, in sealed cattle cars, about 
15,000 of the former Latvian elite, as well as suspected anticom- 
munists, including 5,154 women and 3,225 children. In all, 
during the first year of occupation, Latvia lost 35,000 people to 
deportations or executions. Most deportees died in Siberia. 

The equally brutal Nazi occupation lasted until May 8, 1945. 
Latvia's Jews and Gypsies were particularly subjected to mass 
annihilation, and only a small number of each group survived 
this holocaust. The Nazis had no intention of liberating Latvia 
or providing renewed independence. Even the bulk of nation- 
alized property was not returned. They did, however, draft 
young men into the armed forces — an illegal move in occupied 
territories, according to international law. These young people 
fought against the Red Army in two divisions, suffering high 
casualties. 

With the advance of the Red Army into Latvia, about 
200,000 Latvian refugees fled in panic to the West. Many lost 
their lives in the Baltic Sea, and others were bombed, together 
with their horse-drawn wagons. A sizable group was captured 
and turned back to await punishment for their "disloyalty." 
About 150,000 refugees from Latvia settled in the West, where 
many of them continued a half-century-long struggle against 
the occupation of their homeland. 

The reestablishment of Soviet control in the mid-1 940s was 
not welcomed. Many Latvians joined the guerrilla movement, 
which fought the occupying power for close to a decade. To 
break this resistance and also to force peasants into collective 
farms, new deportations to Siberia, involving more than 40,000 
people (10,590 of them children under sixteen years of age), 
were completed on March 25, 1949. This date was to become a 
focal point of demonstrations in 1988. 



100 



Latvia 



The leading positions in postwar Latvia's political, economic, 
and cultural life were filled by Russians or Russified Latvians, 
known as latovichi, who had spent much or all of their lives in 
the Soviet Union. Political power was concentrated in the Com- 
munist Party of Latvia (CPL), which numbered no more than 
5,000 in 1945. The rapid growth of industry attracted migrant 
workers, primarily from Russia, further facilitating the pro- 
cesses of Russification and Sovietization. Net immigration from 
1951 to 1989 has been estimated at more than 400,000. 

After Stalin's death in 1953, conditions for greater local 
autonomy improved. In Latvia, beginning in 1957, a group of 
national communists under the leadership of Eduards Berk- 
lavs, deputy premier of the Latvian Council of Ministers, began 
a serious program of Latvianization. He and his supporters 
passed regulations restricting immigration, requested that 
party and government functionaries know the Latvian lan- 
guage, and planned to limit the growth of industry requiring 
large inputs of labor. Increased funding was planned for local 
requirements, such as agricultural machines, urban and rural 
housing, schools, hospitals, and social centers, rather than for 
Moscow-planned "truly grandiose projects." 

These programs were not well received in Moscow, and a 
purge of about 2,000 national communists was initiated in July 
1959. Many of the most gifted individuals in Latvia lost their 
positions and had to endure continuous harassment. 

Berklavs himself was exiled from Latvia and expelled from 
the CPL. Later, upon returning to Latvia, he was one of the 
leaders of the Latvian underground opposition and coau- 
thored a 1974 letter with seventeen Latvian communists, detail- 
ing the pace of Russification in Latvia. In 1988 Berklavs became 
one of the key founders of the Latvian National Independence 
Movement (Latvijas Nacionala neatkaribas kustiba — LNNK), 
and as an elected deputy in the Latvian parliament he vigor- 
ously defended Latvian interests. 

After the purge of the national communists, Latvia experi- 
enced a particularly vindictive and staunchly pro-Moscow lead- 
ership. Under the iron fist of hard-liner Arvids Pelse (CPL first 
secretary, 1959-66), who later became a member of the Politi- 
cal Bureau (Politburo) of the Central Committee of the Com- 
munist Party of the Soviet Union (CPSU), Latvia suffered many 
restrictions and petty harassments in all fields of national cul- 
ture and social development. Sovietization and Russification 
programs were of an intensity and dimension not found in 



101 



Estonia, Latvia, and Lithuania: Country Studies 

either Estonia or Lithuania. Pelse was replaced by Augusts Voss 
(CPL first secretary, 1966-84), who was equally insensitive to 
Latvian demands. With the advent of a new period of glasnost 
(see Glossary) and national awakening, Voss was transferred to 
Moscow to preside over the Supreme Soviet's Council of 
Nationalities and was replaced by Boris Pugo, a former chief of 
Latvia's Committee for State Security (Komitet gosudarstven- 
noy bezopasnosti — KGB). Pugo, who served as CPL first secre- 
tary until 1988, subsequently gained prominence as a partici- 
pant in the abortive Soviet coup of August 1991. 

The Pursuit of Independence, 1987-91 

The national awakening came about in large measure as a 
result of Gorbachev's loosening of the reins of repression and 
his public stress on truth and freedom of expression. When 
open demonstrations started in 1987, Latvians were no longer 
lacking in social cohesion. The purpose of these "calendar" 
demonstrations was to publicly commemorate the events of 
June 13-14, 1941 (the mass deportations of Latvians to the 
Soviet Union); August 23, 1939 (the signing of the Nazi-Soviet 
Nonaggression Pact); and November 18, 1918 (the proclama- 
tion of Latvian independence). During the several years lead- 
ing up to the first demonstrations by Helsinki '86 on June 14, 
1987, several groups had labored with missionary zeal to 
inspire Latvians to work for a number of social and political 
causes. 

One group that organized in 1976 committed itself to the 
revival of folk culture and, in spite of harassment, succeeded in 
rekindling interest in Latvian traditions and in awakening 
pride in being Latvian. Parallel to the folk culture group, 
another movement focused on the repair of old churches and 
monuments and the protection of the environment. The 
founder of this movement, the Environmental Protection Club 
(EPC), acknowledged that its primary goal was to raise the con- 
sciousness of the general public. Indeed, the EPC became the 
organization within which many individuals opposed to various 
aspects of Sovietization and Russification could unite. Under 
the seemingly nonpolitical umbrella of the EPC, they could 
organize far more radical bodies, such as the Latvian National 
Independence Movement. 

A dynamic group of young theologians within Latvia's mori- 
bund Evangelical Lutheran Church also began a campaign to 
reactivate their congregations and the structure of the church 



102 



c 

Latvia 



itself. The Rebirth and Renewal (Atdzimsana un Atjaunosana) 
group did not have many members, but its activism and con- 
frontation with communist party officials and policies ener- 
gized people within the growing religious communities as well 
as in the wider society. Indeed, several individuals from this 
group served as catalysts for the creation of the Popular Front 
of Latvia (Latvijas Tautas Fronte — LTF). 

The mobilization of a larger constituency of Latvians 
occurred as a result of the successful campaign to stop the con- 
struction of a hydroelectric dam on the Daugava River in 1987. 
The initiator of this campaign, journalist Dainis Ivans, was later 
elected the first president of the LTF. 

The "calendar" demonstrations, led by Helsinki '86 during 
1987, electrified the Latvian population. Most people expected 
the authorities to mete out swift and ruthless retribution. 
When they did not, even more people joined in. In 1988 this 
grassroots protest was joined by the Latvian intelligentsia, 
whose demands for decentralization and democratization were 
forcefully articulated at the June 1-2 plenum of the Latvian 
Writers Union. Several months later, the idea of a popular front 
was brought to fruition, with a formal first congress organized 
on October 8-9, 1988. 

The LTF had more than 100,000 dues-paying members and 
chapters in almost every locality in Latvia. These members 
slowly took the initiative in politics and became a de facto sec- 
ond government, pushing the Latvian Supreme Soviet to adopt 
a declaration of sovereignty and economic independence in 
July 1989. They also helped elect a majority of their approved 
candidates for the all-union Congress of People's Deputies in 
the spring of 1989; for the municipal local elections in Decem- 
ber of that year; and for the critical parliamentary elections of 
March-April 1990. Slightly more than two-thirds of the dele- 
gates in the new parliament, now known as the Supreme Coun- 
cil, voted in favor of a transition to a democratic and 
independent Latvia on May 4, 1990. This process was marred 
by several instances of Soviet aggression, most notably in Janu- 
ary 1991, when five people were killed during an attack on the 
Latvian Ministry of Interior in Riga by units of the Soviet Minis- 
try of Internal Affairs Special Forces Detachment (Otryad mil- 
itsii osobogo naznacheniya — OMON), commonly known as the 
Black Berets. The transition turned out to be much briefer 
than anyone could have expected, however, because of the 
failed Soviet coup of August 1991. Latvia declared indepen- 



103 



Estonia, Latvia, and Lithuania: Country Studies 

dence on August 21, 1991. Soon thereafter, the Soviet Union 
recognized Latvia's independence, and once again Latvia was 
able to join the world community of nations. 

Physical Environment 

Latvia is traditionally seen as a tiny country. In terms of its 
population of about 2.6 million, it deserves this designation. 
Geographically, however, Latvia encompasses 64,589 square 
kilometers, a size surpassing that of better-known European 
states such as Belgium, the Netherlands, Switzerland, and Den- 
mark. Seen from the air, Latvia is an extension of the East Euro- 
pean Plain. Its flat terrain differs little from that of its 
surrounding neighbors. Latvia's only distinct border is the Bal- 
tic Sea coast, which extends for 531 kilometers. Its neighbors 
include Estonia on the north (267 kilometers of common bor- 
der), Lithuania on the south (453 kilometers), Belarus on the 
southeast (141 kilometers), and Russia on the east (217 kilome- 
ters). Prior to World War II, Latvia bordered eastern Poland, 
but as a result of boundary changes by the Soviet Union, this 
territory was attached to Belorussia. Also, in 1944 Russia 
annexed the northeastern border district of Latvia, known as 
Abrene, including the town of Pytalovo (see fig. 2). 

Geographic Features 

The physiography of Latvia and its neighboring areas was 
formed, to a large degree, during the Quartenary period and 
the Pleistocene ice age, when soil and debris were pushed by 
glaciers into mounds and hills. Undulating plains cover 75 per- 
cent of Latvia's territory and provide the main areas for farm- 
ing; 25 percent of the territory lies in uplands of moderate- 
sized hills. About 27 percent of the total territory is cultivable, 
with the central Zemgale Plain south of Riga being the most 
fertile and profitable. The three main upland areas — in the 
provinces of Kurzeme (western Latvia), Vidzeme (central 
Latvia), and Latgale (eastern Latvia) — provide a picturesque 
pattern of fields interspersed with forests and numerous lakes 
and rivers. In this area, the extensive glacial moraines, eskers, 
and drumlins have limited the profitability of agriculture by 
fragmenting fields and presenting serious erosion problems. 

About 10 percent of Latvian territory consists of peat bogs, 
swamps, and marshes, some of which are covered by stunted 
forest growth. Forests are the outstanding feature of Latvia, 



104 



Latvia 



claiming 42 percent of the territory. Lumber and wood prod- 
ucts are among the country's most important exports. Two- 
thirds of the forests consist of Scotch pine or Norway spruce. 
Latvian forests differ from those of North America primarily 
because of their relatively brush-free understory. The forest 
floor, however, is far from a biological desert, as is often the 
case in tree plantations. Indeed, one of the most widespread 
pastimes of the population is picking blueberries, mushrooms, 
cranberries, and other bounties of the natural environment. 

Few of the forests are fully mature because of previous over- 
cutting and also because of several violent storms during the 
1960s, which snapped or uprooted millions of trees. As a conse- 
quence, most of the wood today is derived from thinning and 
improvement cuts, forming 50 percent of the annual total 
growth increment of 8 million cubic meters of wood. 

For a long time, wood has been a basic source of energy. The 
utilization of wood as fuel has increased dramatically in the 
1990s, even in cities, because of the numbing price hikes on 
other forms of energy. Local wood is also an important 
resource for the pulp and paper industry and for specialized 
plywood and furniture manufacturers. A great concern today is 
the unregulated cutting of timber for the foreign market. 
Prices paid by European wood buyers are phenomenally high 
by local standards, and there is much pressure to utilize this 
opportunity for cash accumulation, even without legal permits. 
By 1992 the problem had become so serious that Latvian for- 
estry officials were given the right to carry firearms. 

Not all forests are productive. Many areas, especially aban- 
doned, formerly private farms, have become overgrown with 
low-value alders and other scrub trees. With the return of pri- 
vate farming, these areas are once again being reclaimed for 
agriculture. In the process, however, there is a danger that 
these areas, which are ideal for wildlife, will become threat- 
ened. The decades-long neglect of extensive areas of marginal 
farmland was a boon for the establishment of unique ecologi- 
cal conditions favorable for the survival of animal species rarely 
found in other parts of Europe. According to a World Wildlife 
Fund study in 1992, Latvia has unusual populations of black 
storks, small eagles, otters, beaver, lynx, and wolves. There are 
also great concentrations of deer (86,000), wild boar (32,000), 
elk (25,000), moose (13,000), and fox (13,000). Many Latvians 
today are planning to exploit this resource by catering to for- 
eign hunters. 



105 



Estonia, Latvia, and Lithuania: Country Studies 

The variegated and rapidly changing physiography of glacial 
moraines and lowlands has also allowed temperate flora, such 
as oaks, to grow within a few hundred meters of northern flora, 
such as bog cotton and cloudberries. This variety and the rapid 
change in natural ecosystems are among the unique features of 
the republic. 

The Soviet system left behind another windfall for natural- 
ists. The Latvian western seacoast was a carefully guarded bor- 
der region. Almost all houses near the sea were razed or 
evacuated. As a result, about 300 kilometers of undeveloped 
seashore are graced only by forests of pine and spruce and eco- 
logically unique sand dunes. The temptation for fast profit, 
however, may foster violation of laws that clearly forbid any con- 
struction within one kilometer of the sea. Unless the govern- 
ment takes vigorous action, one of the last remaining wild 
shorelines in Europe may become just a memory. 

The seashore adjoining the population centers around Riga 
was a major focus of tourism during the Soviet era. Jurmala, 
with its many sanatoriums and tourist accommodations, its tall 
pines, sandy beaches, and antique architecture, is now experi- 
encing a wrenching readjustment. East European tourists can 
no longer afford to come here, and Western tourists have not 
yet discovered the area and its relatively low prices. West Euro- 
peans may be loath to come, however, because excessive pollu- 
tion has closed Jurmala beaches to swimming since 1988. 
Moreover, facilities and accommodations adequate for Soviet 
tastes fall far short of minimal standards expected in the West. 

Latvia has an abundant network of rivers, contributing to the 
visual beauty and the economy of the country. The largest river 
is the Daugava, which has been an important route for several 
thousand years. It has been used by local tribes as well as by 
Vikings, Russians, and other Europeans for trade, war, and con- 
quest. With a total length of 1,020 kilometers, the Daugava (or 
Zapadnaya Dvina in its upper reaches) originates in the Valday 
Hills in Russia's Tver 1 Oblast, meanders through northern 
Belarus, and then winds through Latvia for 370 kilometers 
before emptying into the Gulf of Riga. It is about 200 meters 
wide when it enters Latvia, increasing to between 650 and 750 
meters at Riga and to 1.5 kilometers at its mouth. 

The river carries an average annual flow of twenty-one cubic 
kilometers. Its total descent within Latvia of ninety-eight meters 
has made it an attractive source of hydroelectric power produc- 
tion. The first hydroelectric station, at Kegums, was built dur- 



106 



Latvia 



ing Latvia's independence period. The second dam, at 
Plavinas, aroused an unusual wave of protest in 1958. Most 
Latvians opposed the flooding of historical sites and a particu- 
larly scenic gorge with rare plants and natural features, such as 
the Staburags, a cliff comparable in cultural significance to the 
Lorelei in Germany. The construction of the dam was 
endorsed in 1959, however, after the purge of relatively liberal 
and nationally oriented leaders under Berklavs and their 
replacement by Moscow-oriented, ideologically conservative 
cadres led by Pelse. The third dam, just above Riga, did not 
provoke much protest because of the seeming hopelessness of 
the cause. The proposed fourth dam, at the town of Daugavpils 
on the Daugava River, became the rallying point for protest in 
1986-87 by hundreds of thousands of Latvians. This dam was 
not constructed, in spite of the vast expenditures already 
poured into the project. 

Smaller rivers include the Lielupe, in central Latvia, with an 
average annual flow of 3.6 cubic kilometers; the Venta, in the 
west, with 2.9 cubic kilometers; the Gauja, in the northeast, 
with 2.5 cubic kilometers; and the Aiviekste, in the east, with 
2.1 cubic kilometers. Very little hydroelectric power is gener- 
ated by their waters, although planners are now thinking of 
reactivating some of the abandoned older dams and turbines. 
The Gauja is one of Latvia's most attractive, relatively clean riv- 
ers and has an adjoining large national park along both of its 
banks as one of its notable features. Its cold waters attract trout 
and salmon, and its sandstone cliff and forest setting are 
increasingly a magnet for tourists interested in the environ- 
ment. 

More than 60 percent of the annual water volume of Latvia's 
six largest rivers comes from neighboring countries, mainly 
from Belarus and Lithuania. These adjoining resources create 
obvious needs for cooperation, especially in pollution control. 
The dangers from a lack of cooperation were brought home to 
Latvians in November 1990, when a polymer complex in 
Navapolatsk, Belarus, accidentally spilled 128 tons of cyanide 
derivatives into the Daugava River with no warning to down- 
stream users in Latvia. Only the presence of numerous dead 
fish alerted Latvian inhabitants to the danger. 

Climate 

Latvia's northern location matches Labrador's latitude. In 
the summer, daylight hours are much longer and in the winter 



107 



Estonia, Latvia, and Lithuania: Country Studies 

much shorter than in New York City, for example. In December 
it is still pitch dark at 9:00 A.M., and daylight disappears before 
4:00 P.M. This light deprivation may be an important ingredi- 
ent in deciphering certain aspects of Latvian collective behav- 
ior. It may account for the general exuberance and joie de vivre 
in spring and summer, and the relative taciturnity and melan- 
choly the rest of the year. The climate is far different from that 
of Labrador, however, because of the effect of the Gulf Stream 
flowing across the Atlantic Ocean from Mexico. Average tem- 
peratures in winter are reasonably mild, ranging in January 
from -2.8°C in Liepaja, on the western coast, to -6.6°C in the 
southeastern town of Daugavpils. July temperatures range from 
16.7°C in Liepaja to 17.6°C in Daugavpils. Latvia's proximity to 
the sea brings high levels of humidity and precipitation, with 
average annual precipitation of 566 millimeters in Riga. There, 
an average of 180 days per year have precipitation, forty-four 
days have fog, and only seventy-two days are sunny. Continuous 
snow cover lasts eighty-two days, and the frost-free period lasts 
177 days. 

This precipitation has helped provide the abundant water 
for Latvia's many rivers and lakes, but it has created many prob- 
lems as well. A large part of agricultural land requires drainage. 
Much money has been spent for amelioration projects involv- 
ing the installation of drainage pipes, the straightening and 
deepening of natural streams, the digging of drainage ditches, 
and the construction of polder dams. During the 1960s and 
1970s, drainage work absorbed about one-third of all agricul- 
tural investments in Latvia. Although accounting for only one- 
third of 1 percent of the territory, Latvia was responsible for 11 
percent of all artificially drained land in the Soviet Union. 

An additional problem associated with precipitation is the 
difficulty of early mechanized sowing and harvesting because 
of waterlogged fields. Heavy precipitation occurs, especially 
during harvest time in August and September, requiring heavy 
investment outlays in grain-drying structures and ventilation 
systems. In 1992, ironically, Latvia experienced the driest sum- 
mer in recorded weather history, but unusually heavy rains in 
the preceding spring kept crop damage below the extent 
expected. The moist climate has been a major factor orienting 
Latvian agriculture toward animal husbandry and dairying. 
Even most of the field crops, such as barley, oats, and potatoes, 
are grown for animal feed. 



108 




View of Riga, with pavilions of the central market in center and the 

Daugava River in rear 
Courtesy Roland Sudmalis 
Street in Liepaja 
Courtesy Linda Sudmalis 



109 



Estonia, Latvia, and Lithuania: Country Studies 

Natural Resources 

Latvia cannot claim valuable natural resources. Nevertheless, 
the abundant presence of such materials as limestone for 
cement (6 billion cubic meters), gypsum (165 million cubic 
meters), high-quality clay (375 million cubic meters), dolomite 
(615 million cubic meters), peat (480 million tons), and con- 
struction materials, including gravel and sand, satisfy local 
needs. Fish from the Baltic Sea is another potential export 
resource export. Amber, million-year-old chunks of petrified 
pine pitch, is often found on the beaches of the Baltic Sea and 
is in high demand for jewelry. It has also had a symbolic impact 
on the country, which is often called Dzimtarzeme, or Amber- 
land. The future may hold potentially more valuable resources 
if oil fields are discovered in Latvian territorial waters, as some 
geologists have predicted. 

Society 
Population 

Latvia's population has been multiethnic for centuries. In 
1897 the first official census in this area indicated that Latvians 
formed 68.3 percent of the total population of 1.93 million; 
Russians accounted for 12.0 percent, Jews for 7.4 percent, Ger- 
mans for 6.2 percent, and Poles for 3.4 percent. The remainder 
were Lithuanians, Estonians, Gypsies, and various other nation- 
alities. 

World War I and the emergence of an independent Latvia 
led to shifts in ethnic composition. By 1935, when the total 
population was about 1.9 million, the proportion of Latvians 
had increased to 77.0 percent of the population, and the per- 
centages for all other groups had decreased. In spite of heavy 
war casualties and the exodus of many Latvians to Russia, in 
absolute terms the number of Latvians had grown by 155,000 
from 1897 to 1935, marking the highest historical level of 
Latvian presence in the republic. Other groups, however, 
declined, mostly as a result of emigration. The largest change 
occurred among Germans (from 121,000 to 62,100) and Jews 
(from 142,000 to 93,400). During World War II, most Germans 
in Latvia were forced by Adolf Hitler's government to leave for 
Germany as a result of the expected occupation of Latvia by 
Stalin's troops. The Jews suffered the greatest tragedy, however, 
when between 70,000 and 80,000 of them were executed by the 



110 



Latvia 



Nazi occupation forces between 1941 and 1944. Latvians also 
suffered population losses during this period as a result of 
deportations, executions, and the flight of refugees to the 
West. By 1959 there were 169,100 fewer Latvians in absolute 
terms than in 1935, in spite of the accumulated natural 
increase of twenty-four years and the return of many Latvians 
from other parts of the Soviet Union after 1945. 

The balance of ethnic groups in 1959 reflected the vagaries 
of war and the interests of the occupying power. The Latvian 
share of the population had decreased to 62.0 percent, but that 
of the Russians had jumped from 8.8 percent to 26.6 percent. 
The other Slavic groups — Belorussians, Ukrainians, and 
Poles — together accounted for 7.2 percent, and the Jews 
formed 1.7 percent. Indeed, one of the greatest concerns Latvi- 
ans had during the almost half-century under Soviet rule was 
the immigration of hundreds of non-Latvians, which drastically 
changed the ethnic complexion of the republic. Even more, 
with each successive census Latvians saw their share of the pop- 
ulation diminish, from 56.8 percent in 1970 to 54.0 percent in 
1979 and to 52.0 percent in 1989 (see table 15, Appendix). 
With each year, a net average of 11,000 to 15,000 non-Latvian 
settlers came to the republic, and such migration accounted 
for close to 60 percent of the annual population growth. The 
newcomers were generally younger, and hence their higher 
rates of natural increase helped to diminish the Latvian pro- 
portion even more. 

The threat of becoming a minority in their own land was one 
of the most important elements animating the forces of politi- 
cal rebirth. There was a widespread feeling that once Latvians 
lost their majority status, they would be on the road to extinc- 
tion. During the period of the national awakening in the late 
1980s, this sentiment produced a pervasive mood of intense 
anxiety, perhaps best expressed by the popular slogan "Now or 
Never." It also came across very bluntly in "The Latvian Nation 
and the Genocide of Immigration," the title of a paper pre- 
pared by an official of the Popular Front of Latvia in 1990. By 
then, largely as a result of the great influx of new settlers 
encouraged by Soviet authorities, Latvians were a minority in 
six of the largest cities in Latvia (see table 16, Appendix). Even 
in the capital city of Riga, Latvians had shrunk to only about a 
third of the population. Thus, they were forced to adapt to a 
Russian-speaking majority, with all of its attendant cultural and 
social patterns. There was not a single city district in Riga 



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Estonia, Latvia, and Lithuania: Country Studies 

where Latvians could hope to transact business using only 
Latvian. This predominantly Russian atmosphere has proved 
difficult to change, in spite of the formal declaration of Latvian 
independence and the passing of several Latvianization laws. 

Even in the countryside of certain regions, Latvians are 
under cultural and linguistic stress from their unilingual neigh- 
bors. The most multinational area outside of cities can be 
found in the province of Latgale in the southeastern part of 
Latvia. There the Daugavpils district (excluding the city) in 
1989 was 35.9 percent Latvian, Kraslava district 43.1 percent, 
Rezekne district (excluding the city) 53.3 percent, and Ludza 
district 53.4 percent. For several decades, Latvians in these dis- 
tricts were forced to attend Russian-language schools because 
of the dearth or absence of Latvian schools. Not surprisingly, 
during the Soviet period there was a process of assimilation to 
the Russian-language group. With the advent of independence, 
Latgale has become a focal point for official and unofficial pro- 
grams of Latvianization, which include the opening of new 
Latvian schools, the printing of new Latvian local newspapers, 
and the opening of a Latvian television station for Latgalians. A 
major thrust in Latvianization is also provided by the resurgent 
Roman Catholic Church and its clergy. 

Most Latvians themselves are not aware that by 1989 they 
had become a minority of the population in the usually most 
active age-group of twenty to forty-four (see table 17, Appen- 
dix). In the age category of thirty-five to thirty-nine, Latvians 
were down to 43.0 percent of the total. The period spanning 
the years from the late teens to middle age usually provides the 
most important pool of people for innovation and entrepre- 
neurship (see fig. 8). The relatively low Latvian demographic 
presence in this group could partly account for the much 
smaller visibility of Latvians in the privatization and business 
entrepreneurship process within the republic. 

Population Changes since Independence 

In 1994, according to official estimates, Latvia had a popula- 
tion of 2,565,854 people. This figure was smaller than for the 
1989 census (2,666,567), reflecting a fundamental change in 
the demography of Latvia. The population in the republic 
decreased for the first time since 1945, except in 1949 when 
more than 40,000 Latvians were deported. Between January 
1989 and January 1994, the total decrease was more than 
100,000. 



112 



Latvia 



Two important factors have contributed to this change. Dur- 
ing 1991, 1992, and 1993, the natural increase was negative; in 
other words, more people died than were born. The moving 
variable has been the number of births. In 1991 the total num- 
ber born was only 34,633, which was 8.7 percent less than in 
the previous year and 18 percent less than in 1987 (see table 
18, Appendix). The number of deaths remained about con- 
stant. For the first time since 1946, more deaths than births 
occurred in 1991 — by a margin of 116. This gap increased sig- 
nificantly in 1992, when 3,851 more deaths than births were 
recorded. The death rate increased from 13.5 per 1,000 in 
1992 to 16.3 per 1,000 in 1994, and the birth rate fell from 12.9 
per 1,000 in 1992 to 9.5 per 1,000 in 1994. The postponement 
by many families of procreation is not surprising in view of the 
economic traumas suffered by most people and the general 
political and economic uncertainties prevailing in the country. 

An even more important factor at work in the overall 
decrease of population has been the net out-migration of 
mostly nonindigenous individuals (see table 19, Appendix). 
The principal factors affecting the direction of migration 
included Latvia's declaration of independence and its laws 
checking uncontrolled immigration into the country. Indepen- 
dence brought a shift in political power to the Latvian group. 
Many individuals who could not adjust to living in a newly "for- 
eign" country or who did not want to accommodate the new 
Latvian language requirements in certain categories of employ- 
ment decided to leave. 

A sociological poll published in November 1992 indicated 
that 55 percent of non-Latvians would not move east (that is, to 
other parts of the former Soviet Union) even if they were 
offered a job and living accommodations; 19 percent expressed 
a willingness to do so (3 percent only temporarily); and 26 per- 
cent said they did not know whether they would move. Only 
about 205,000 non-Latvians out of 1.3 million living in Latvia 
were willing to leave permanently if offered jobs and roofs over 
their heads. Aside from economic considerations, this surpris- 
ingly strong attachment to Latvia by non-Latvian ethnic groups 
is attributable to the fact that many of them were born in Latvia 
and have had little if any contact with their forebears' geo- 
graphical areas of origin. According to the 1989 census, of the 
non-Latvian ethnic groups in the country, about 66 percent of 
Poles, 55 percent of Russians, 53 percent of Jews, 36 percent of 



113 



Estonia, Latvia, and Lithuania: Country Studies 




POPULATION IN THOUSANDS 



Source: Based on information from Latvia, Valsts Statistikas Komiteja, Latvija Skaitlos, 
1993 {Latvia in Figures, 1993), Riga, 1994, 16. 



Figure 8. Population of Latvia by Age and Gender, 1993 

Lithuanians, 31 percent of Belorussians, and 19 percent of 
Ukrainians had been born in Latvia (see table 20, Appendix). 

Marriage and Divorce 

In spite of Latvians' fears of becoming a minority and in 
spite of the strains caused by Russification and language ineq- 
uities, a relatively high proportion of Latvians have married 
members of other ethnic groups. Some 30 percent of mar- 
riages involving Latvians were of mixed nationality in 1988 
(although only 17 percent of all marrying Latvians in 1988 
entered into mixed marriages). This rate of intermarriage was 
one of the highest of any titular nationality in the republics of 
the Soviet Union. Comparable rates were found in Belorussia 
(34.6 percent) and Ukraine (35.6 percent); a much lower rate 
was found in Estonia (16.1 percent). The marriage statistics of 
1991 do not indicate any significant changes in this respect, 



114 



Latvia 



with just under 18 percent of all Latvians marrying members of 
other ethnic groups. 

Latvia has an extremely high divorce rate, but there is no 
adequate explanation for it. In 1991 Latvia registered 22,337 
weddings and 11,070 divorces, for a divorce rate of 49.6 per- 
cent. Among various ethnic groups, these rates vary: Latvian 
males, 39.1 percent, and females, 39.9 percent; Lithuanian 
males, 52.7 percent, and females, 45.0 percent; Polish males, 
43.7 percent, and females, 54.5 percent; Russian males, 60.2 
percent, and females, 58.3 percent; Belarusian males, 58.8 per- 
cent, and females, 61.0 percent; Ukrainian males, 64.4 percent, 
and females, 65.2 percent; Jewish males, 67.6 percent, and 
females, 65.9 percent; and males of other ethnic groups, 64.8 
percent, and females, 70.0 percent. During the first nine 
months of 1992, as compared with the same period in 1991, 
marriages decreased by 10 percent, but divorces increased by 
24 percent. For every 1,000 marriages, there were 683 divorces. 

Perhaps the instability of marriage accounts for the relatively 
high percentage of births outside of marriage. In 1989 in 
Latvia, 15.9 percent of infants were born to women who were 
not married. In Lithuania the comparative rate was 6.5 per- 
cent, but in Estonia the rate was 25.2 percent. In the Soviet 
Union as a whole in 1988, the rate was 10.2 percent. 

Urbanization, Employment, and Education 

Latvia was one of the most urbanized republics of the former 
Soviet Union, reaching an urbanization rate of 71 percent in 
1990. Subsequently, the rate of urbanization decreased and was 
estimated to be 69.5 percent in 1992. Part of the reason for the 
decline no doubt can be found in the out-migration of non- 
Latvians to other republics. It seems probable, as well, that a 
slight shift back to rural areas occurred as a result of the start- 
up of some 50,000 private farms. 

The rapid economic changes of the early 1990s have 
brought about an employment reorientation by various ethnic 
groups. The division of labor between Latvians and non-Latvi- 
ans that prevailed in 1987, the most recent year for which such 
data are available, offers a general indication of where the 
groups work. The Latvian share was above average in culture 
and art (74.6 percent), agriculture (69.5 percent), public edu- 
cation (58.8 percent), communications (56.7 percent), admin- 
istration (56.4 percent), credit and state insurance (55.1 
percent), and health care and social security (53.5 percent). 



115 



Estonia, Latvia, and Lithuania: Country Studies 

Latvians were significantly underrepresented in heavy industry 
(36.3 percent), light industry (33.6 percent), machine building 
(31.0 percent), the chemical industry (30.1 percent), railroad 
transport (26.5 percent), and water transport (11.5 percent). 
The work categories facing the greatest threat of unemploy- 
ment are those with the fewest Latvians. This may create future 
strains and possible confrontations between Latvians and non- 
Latvians if solutions are not found. 

In the long run, however, higher education might be an 
important variable in advancement and adjustment to new eco- 
nomic situations. In 1989 only ninety-six out of 1,000 Latvians 
completed higher education, compared with 115 out of 1,000 
for the entire population. The most educated were Jews, with a 
rate of 407 per 1,000 completing higher education, followed by 
Ukrainians with 163 and Russians with 143. Belorussians, Poles, 
and Lithuanians had a rate below that of the Latvians. One of 
the key variables accounting for this spread in educational 
achievements is rural-urban location. Jews and Russians are 
much more urban than Latvians or Poles. It is difficult to com- 
pete in entrance examinations after attending schools in rural 
areas where there are regular official interruptions in the fall 
for harvesting and in the spring for planting. Distances and 
poor transportation networks provide another obstacle to com- 
pleting secondary school. Most institutions of higher learning 
are located in Riga. Unless one has relatives or friends there, it 
is difficult to find living accommodations. Student residences 
can cater to only a small proportion of applicants. 

One of the unique aspects of the Latvian education system 
was the introduction during the 1960s of schools with two lan- 
guages of instruction, Latvian and Russian, in which each 
group held classes in its own language. About a third of all 
schoolchildren went to these schools, and the others attended 
the purely Latvian or Russian schools. Extracurricular activities 
and parent-teacher events were expected to be held together, 
and almost inevitably they were conducted in Russian because 
of the imbalance in language knowledge. These schools did 
not foster interethnic friendship, as originally hoped, and they 
were being phased out in post-Soviet Latvia. In the 1993-94 
school year, sixty-nine out of 574 such primary schools 
remained. 

All children, from about the age of six, must complete nine 
years of primary schooling, which may be followed by three 
years of secondary education or one to six years in technical, 



116 




Dinner preparations in 
households in Riga and 
Priekule, near Liepaja 
Courtesy Linda Sudmalis 



Estonia, Latvia, and Lithuania: Country Studies 

vocational, or art schools. In the 1993-94 school year, a total of 
76,619 students were enrolled in primary schools, 242,677 in 
secondary schools, 27,881 in vocational schools, 19,476 in spe- 
cial secondary institutions, and 7,211 in special schools for the 
physically and mentally handicapped. There were eighteen 
universities and other institutions of higher education, with 
36,428 students. The literacy rate approached 100 percent. 

One of the innovations introduced with independence was 
the reestablishment of schools or programs for other ethnic 
groups. Before the Soviet occupation in 1940, Latvia had more 
than 300 state-supported schools offering instruction for differ- 
ent ethnic groups: 144 Russian, sixty Jewish, sixteen Polish, 
thirteen Lithuanian, four Estonian, one Belorussian, and 
eighty-five with several languages of instruction. All of these 
except the Russian schools were closed after 1945. After 1990 
various ethnic groups were offered the opportunity of again 
maintaining schools in their own language of instruction, and 
by the 1993-94 school year some 210 schools were in opera- 
tion: more than 200 Russian, four Polish, one Estonian, one 
Lithuanian, one Ukrainian, and one Jewish. Latvia had the first 
Jewish secondary school in the entire Soviet Union. It should 
be noted that most of the non-Latvian groups had largely 
assimilated with the Russians, and many of their members did 
not speak their native tongue. 

Health and Welfare 

In the early 1990s, the health care system that Latvia inher- 
ited from the Soviet regime had yet to meet Western standards. 
It continued to be hampered by shortages of basic medical sup- 
plies, including disposable needles, anesthetics, and antibiot- 
ics. In 1992 there were some 176 hospitals, with 130 beds per 
10,000 inhabitants — more than in Estonia and Lithuania — but 
they were old, lacked modern facilities, and were concentrated 
in urban areas. The number of physicians, forty-one per 10,000 
inhabitants, was high by international standards, but there 
were too few nurses and other paramedical personnel. 

At a time when most of the modern world was experiencing 
rapid strides in the extension of average life span, the Soviet 
Union and Latvia were going backward. Between 1965 and 
1990, the male life span in Latvia decreased 2.4 years, from 66.6 
to 64.2 years. For females, there was a decrease between 1965 
and 1979 from 74.4 to 73.9 years, but the average life span rose 
to 74.6 by 1990. In comparison, in 1989 the average life expect- 



118 



Polyclinic in Priekule, with ambulance in front 
Courtesy Roland Sudmalis 

ancy in the Soviet Union was 64.6 for males and 74.0 years for 
females. Overall, Latvia then ranked eighth among the Soviet 
republics. For males, however, Latvia was eleventh, ahead of 
three Soviet Central Asian republics and Russia. Among 
females, Latvia did better, sharing fourth ranking with Ukraine. 

According to the calculations of a Latvian demographer in 
1938-39, Latvia was about thirteen years ahead of the Soviet 
Union in life expectancy. No doubt, an important role in less- 
ening the average life span statistics was played by the massive 
in-migration of people after 1945 from mostly rural and pov- 
erty-stricken parts of the Soviet Union. Even in 1988-89, within 
Latvia there was a difference of 0.8 year between Latvian and 
Russian life expectancy. Standardized rates that account for 
urban and rural differences show that Latvians live 1.7 years 
longer than Russians. 



119 



Estonia, Latvia, and Lithuania: Country Studies 

Perhaps no other index of the role of Sovietization is as 
indicative as the gap in life expectancy between Latvia and Fin- 
land, the Baltic states' northern neighbor. In 1988 Finland reg- 
istered life span rates of 70.7 years for males and 78.7 for 
females, which were 6.5 and 4.1 years higher than the respec- 
tive rates in Latvia. By 1994 life expectancy in Latvia had 
increased only marginally: 64.4 years for males and 74.8 years 
for females, compared with Finland's rates of 72.1 years for 
males and 79.9 years for females. During the 1930s, Latvia's 
rates had been higher than those in Finland and on a par with 
those of Austria, Belgium, France, and Scotland. 

The infant mortality rate rose to 17.4 deaths per 1,000 live 
births in 1992, after a steady decline beginning in 1970 and an 
estimated eleven deaths per 1,000 live births in 1988. Its rate 
was higher than that of Estonia and Lithuania and almost three 
times the rate of infant mortality in Finland. In 1994 there were 
16.3 deaths per 1,000 population in Latvia. The primary causes 
of infant deaths in Latvia are perinatal diseases; congenital 
anomalies; infectious, parasitic, or intestinal diseases; respira- 
tory diseases; and accidents and poisonings. Environmental 
factors and alcoholism and drug abuse also contribute to infant 
mortality. 

Latvia outpaced most of the other republics in the Soviet 
Union in deaths from accidents, poisonings, and traumas. In 
1989 some 16 percent of males and 5.6 percent of females died 
from these causes. The suicide rate of 25.9 per 100,000 in 1990, 
or a total of 695, was more than twice that of the United States. 
In 1992 the number of suicides increased to 883. Other major 
causes of death include cancer, respiratory conditions, and 
such stress-related afflictions as heart disease and stroke. 
Although drug addiction and acquired immune deficiency syn- 
drome (AIDS) are on the increase, their incidences are not yet 
close to those in many Western countries. 

Traffic deaths in 1990 reached a rate of 43.5 per 100,000 
population, or a total of 1,167. There were 245 homicides in 
1990, a rate of 9.1 per 100,000. This increase represented a dra- 
matic jump from 1988, when the rate was 5.8, and from 1985, 
when it was 5.2. The greater availability of weapons has been 
one cause. More important, Riga and other cities have been 
targeted by mafia-style criminal gangs intent on carving up and 
stabilizing their areas of operation against other gangs. Still 
another cause is the decrease in the efficiency of law enforce- 
ment organs because of low pay, rapid turnover of cadres, lack 



120 



Latvia 



of gasoline for automobiles, and language problems. The rise 
in criminal activity has increased Latvians' stress, interfered 
with their enjoyment of life, and impaired their well-being, 
health, and physical survival. 

Another important ingredient affecting the survival of peo- 
ple in Latvia includes dangerous life-styles and substance 
abuse. Alcohol consumption rose from an average per capita 
rate of 1.9 liters per year in the 1920-34 period to 11.7 liters 
per year in 1985. This sixfold increase in alcohol consumption 
has had deleterious effects in many other areas of life and 
health and is one of the main causes of traffic deaths, drown- 
ings, fires, and crime. 

Most Latvian males are inveterate smokers. A study of six cit- 
ies in the mid-1980s discovered that 63 percent of men were 
active smokers, 13 percent had quit, and only 24 percent had 
never smoked. Smoking takes a particularly heavy toll in Latvia 
because the allowable tar content in cigarettes is high (three 
times as great as in Finland), most of the cheaper brands do 
not have a filter, and most men prefer to inhale deeply. There 
is a high incidence of illnesses related to smoking and environ- 
mental pollution, such as emphysema, lung cancer, bronchial 
asthma, and bronchitis. 

Another habit dangerous to health is the preference for fatty 
diets and minimal attention to exercise. The economic hard- 
ships of recent years appear to have decreased the number of 
grossly overweight people. This may be one of the few unin- 
tended benefits of the reconstruction period. 

The total number of pension recipients in Latvia grew from 
603,600 in 1990 to 657,700 in 1993. Old-age pensions 
accounted for the largest number of awards (500,300), fol- 
lowed by disability pensions (104,200) and survivor's pensions 
(26,300). Old-age pensions remained very low, ranging from 
LVL15 to LVL23.5 (for value of the lats — see Glossary) per 
month, depending on the number of years of work. 

Religion 

In 1935, before Latvia's occupation, official statistics indi- 
cated a fairly broad spectrum of religious traditions. Evangeli- 
cal Lutheranism was the single most widespread creed, 
claiming the attachment of 55.2 percent of the population and 
68.3 percent of ethnic Latvians. Roman Catholicism was the 
second most popular choice, preferred by 24.5 percent of the 
population and 26.4 percent of ethnic Latvians. Because it was 



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Estonia, Latvia, and Lithuania: Country Studies 

especially entrenched in the economically less-developed 
southeastern province of Latgale (70 percent in this region) 
and was commonly seen as being regional rather than national, 
Roman Catholicism's impact on the secular world of politics 
and culture appeared muted in comparison with that of Luthe- 
ranism. The Orthodox Church of Latvia had a following of 9 
percent of the population, with its greatest concentration 
among Russians and other Slavs but with 33 percent of its sup- 
port also coming from ethnic Latvians. Old Believers (see Glos- 
sary), constituting 5.5 percent of the population, are a unique 
Russian fundamentalist sect whose forebears had fled persecu- 
tion from the tsarist empire in the seventeenth century and 
had found refuge in then Swedish- and Polish-controlled 
Latvia. About 5 percent of Latvia's citizens were Jewish. The 
rest of the pre-World War II population was scattered among an 
array of Protestant denominations. 

World War II and a half-century of Soviet occupation and 
persecution of believers fundamentally changed the religious 
spectrum. The Evangelical Lutheran Church, with an esti- 
mated 600,000 members in 1956, was affected most adversely. 
An internal document of March 18, 1987, spoke of an active 
membership that had shrunk to only 25,000. By 1994 religious 
congregations in Latvia numbered 819, of which 291 were 
Lutheran, 192 Roman Catholic, 100 Orthodox, fifty-six Old 
Believer, seventy Baptist, forty-nine Pentecostal, thirty-three 
Seventh-Day Adventist, five Jewish, three Methodist, and two 
Reformed. 

Part of the explanation of the diminished status of Latvia's 
Lutheran Church is to be found in its relative weakness as an 
institution, unable to withstand the pressures of occupation as 
robustly as the Roman Catholic Church. For centuries Latvian 
attachment to Lutheranism was rather tepid, in part because 
this religion had been brought by the Baltic barons and Ger- 
man-speaking clergy. During Latvia's earlier independence 
period (1920-40), efforts were made to Latvianize this church. 
Original Latvian hymns were composed, Latvian clergy became 
predominant, and the New Testament was translated into mod- 
ern Latvian. During the tribulations of World War II, Latvians 
intensified their religiosity, but at the same time the Lutheran 
Church suffered serious losses. Many of the most religious and 
talented individuals and clergy fled as refugees to the West or 
were deported to Siberia. A large number of church buildings 
were demolished by war action. 



122 



Estonia, Latvia, and Lithuania: Country Studies 

The Roman Catholic Church had a much closer historical 
bonding with its flock. During the period of national revival 
through the latter part of the nineteenth century in Latgale, 
the clergy were among the leaders of enlightenment and an 
important bastion against Russification. They nurtured and 
were themselves members of the Latgalian intelligentsia. Dur- 
ing the years of communist occupation, the greater commit- 
ment demanded by the Roman Catholic Church helped 
maintain a higher degree of solidarity against atheist incur- 
sions. For the church, the practice of confession was a useful 
method for monitoring the mood of the population and for 
organizing initiatives to counter or prevent serious cleavages or 
even surreptitious activities by the communist leadership. 
Direct guidance from Rome offered some protection against 
the manipulation of clergy by state functionaries. Finally, the 
population of Latgale did not have the same opportunity to 
flee from Latvia because it was cut off earlier from access to the 
seacoast by the Red Army. Roman Catholic clergy, who were 
unmarried, were also more inclined to remain with their reli- 
gious charges, whereas Lutheran clergy had to take into 
account the safety of their families. 

Most Latvian Jews were annihilated by the Nazis during 
World War II. After the war, a certain number of Jews from 
other parts of the Soviet Union settled in Latvia. Many of them 
had already endured antireligious campaigns under Stalin, and 
there were many obstacles placed in the way of reviving Jewish 
religious activity. Most former Latvian synagogues were confis- 
cated by the state for other uses, and nowhere in the entire 
Soviet Union did there exist any centers for rabbinical educa- 
tion. After Latvia's independence in 1991, there was a resur- 
gence of interest in religious affairs. Five Jewish congregations 
served the growth in demand for services. 

The statistics for 1991 point to an interesting pattern (see 
table 21, Appendix). At that time, far more people were bap- 
tized than married in church. Part of the explanation can be 
found in the requirement by some religions, including Luthe- 
ranism, that people must be first baptized and confirmed 
before having a religious wedding. Another possible explana- 
tion for this phenomenon is that the communist state was quite 
successful in sowing doubts about religion among the young 
and the middle-aged. Many, especially former members of the 
Komsomol and the communist party, feel uncomfortable in 
their personal relationship with the church but also have a 



124 



Latvia 



desire to open more options for their offspring. Indeed, it is a 
common phenomenon to see nonreligious parents sending 
their children to Sunday school for the sake of "character 
building." In the process, however, some of the parents have 
become tied to a church and have joined the congregation. 

During communist rule, every effort was made to curtail the 
influence of religion. All potential avenues of contact with the 
population were cut off. Schools, media, books, and work- 
places were all off-limits to religious organizations. Even charity 
work was forbidden. Indeed, the family itself was not at liberty 
to guide children into active church work until the age of eigh- 
teen. Thus, no Sunday schools, religious choirs, or camps were 
open to young people. Religious publications, with a few excep- 
tions, were limited to yearbooks and song sheets for Sunday 
services. Regular churchgoers were subject to various pres- 
sures, including harassment at work and comradely visits by 
local atheists. Anyone with career ambitions had to forgo visi- 
ble links with religion. The state successfully preempted the 
most important church ceremonies of baptism, confirmation, 
weddings, and funerals by secular ceremonies. In 1986 the 
Lutheran Church registered 1,290 baptisms, 212 confirma- 
tions, 142 marriages, and 605 funerals — a fraction of the activ- 
ity that was to occur in 1991. Evidently, a revolution in the 
status of the church occurred within that brief period. 

Starting with 1987, the Lutheran Church experienced a 
revival pioneered by a group of young, rebellious, and very 
well-educated clergy who formed the organization Rebirth and 
Renewal (Atdzimsana un Atjaunosana). There were confronta- 
tions with communist authorities and with the ossified hierar- 
chy of the Lutheran Church itself, which had become 
somnolent and very accommodating to the demands of secular 
powers. With the advent of political plurality, the Lutheran 
Church was able to expand its role and its activities. Church 
buildings were refurbished, demolished churches were 
renewed, Sunday schools were opened, religious education was 
provided in day schools, and the media reported sermons and 
religious discussions. For several years after the liberalization of 
church activities, religion became extremely fashionable. Part 
of this boom, as acknowledged by the Lutheran clergy, was a 
rebellion against authorities that coincided with the general 
political effervescence. 

The Roman Catholic Church also went through a process of 
renewal, but its changes were not as marked because it had 



125 



Estonia, Latvia, and Lithuania: Country Studies 

been able to maintain a strong presence in the population even 
under the most adverse conditions. Thus, in 1985 the Roman 
Catholics performed 5,167 baptisms, about five times as many 
as the Lutherans. In 1991 the Roman Catholics performed 
10,661 baptisms, more than double the number in 1985. 
Among the Roman Catholics baptized in 1991, only 40 percent 
had been born in families in which the parents had married in 
church. 

A major change in the geography of the Roman Catholic 
Church also presented problems. Whereas in 1935 more than 
70 percent of Roman Catholics resided in the southeastern 
province of Latgale, by 1990 only 42 percent lived there. Thus, 
many Roman Catholics lived throughout Latvia, where often 
no churches of their creed existed. There has been much ecu- 
menical goodwill, and the more numerous Lutheran churches 
are being used by Roman Catholics and by other religious 
groups. Administratively, the Roman Catholic Church com- 
prises the Archdiocese of Riga and the Diocese of Liepaja. 

Latvia's Roman Catholic Church received a great moral 
boost in February 1983 when Bishop Julijans Vaivods was made 
a cardinal. This was the first such appointment in the history of 
Latvia and the first within the Soviet Union. No doubt part of 
the willingness of the communist party to accommodate the 
Roman Catholic Church in this way was the fact that Vaivods 
was eighty-seven years old in 1983. Yet, he confounded the 
communists by living until May 1990, thus providing more than 
seven years of leadership. 

Vaivods, who studied theology in St. Petersburg and was an 
eyewitness to the Bolshevik Revolution, was also an extremely 
able tactician. His efforts on behalf of the Roman Catholic 
Church in the Soviet Union are a classic case of stubborn, low- 
key, but effective opposition to party pressure. The Soviet 
regime had decided to allow Roman Catholic congregations 
outside Latvia and Lithuania to die by not allowing them new 
clergy. Almost daily, delegations of Roman Catholic faithful 
from various parts of the Soviet Union came to Vaivods during 
the 1960s pleading for help. He sent Latvian priests to Lenin- 
grad (St. Petersburg) , Tallinn, and other cities, in spite of local 
shortages. When pressed by the delegations to allow their own 
people to enroll in Latvia's Roman Catholic seminary, Vaivods 
made it clear that the obstacle was not the church but rather 
state authorities who had given him instructions to claim that 
the seminary was too small. Under pressure, the authorities 



126 




St. Gertrude's Church in Riga 
Courtesy Debbie Horrell 



127 



Estonia, Latvia, and Lithuania: Country Studies 

relented and allowed a trickle of seminarians from outside 
Latvia, but as punishment they took away almost half of the 
seminary's rooms. The church skimped and struggled but did 
not change its policy. By 1978 the expropriated space was 
returned, and three years later permission was granted for the 
construction of a new seminary. Thereafter, seminarian num- 
bers increased rapidly from eighteen in 1980 to 107 in 1989. 
Most of the students were non-Latvians slated for service in 
other areas of the Soviet Union. 

Latvian Lutherans also provided help to their brethren in 
other Soviet republics. Lutheran clergy were trained in Latvia 
for Lithuania. More important, Bishop Haralds Kalnins single- 
handedly took care of scattered German Lutherans outside the 
Baltic region. Besides ministering and preaching, he was 
empowered to ordain religious workers and to settle questions 
of theological education. In one six-day trip to Kazakhstan in 
1976, the bishop held seven services in which 400 people 
received Holy Communion, twenty children were christened, 
thirty-five youths were confirmed, and ten couples were mar- 
ried. He was able to carry this load in spite of his advanced age. 

The pre-World War II independent Orthodox Church of 
Latvia was subordinated to the Moscow Patriarchate after the 
war, and its new clergy were trained in seminaries in Russia. It 
remained a major religious organization in Latvia because of 
the heavy influx of Russians and other Orthodox Slavs after the 
war. Only in 1992 did the Orthodox Church of Latvia become 
administratively independent once again. Its cathedral in the 
center of Riga had been transformed by the communists into a 
planetarium with an adjoining coffee shop popularly dubbed 
"In God's Ear." The cathedral is now being restored to its origi- 
nal architecture and purpose. 

With the advent of independence, several other changes 
were introduced as well. Potential Lutheran pastors could now 
receive their training through the Faculty of Theology, which is 
affiliated with the University of Latvia. The Roman Catholics 
acquired a modern new seminary, but they had problems 
recruiting able scholars and teachers as well as students. Most 
Roman Catholic seminarians from outside Latvia have 
returned to their respective republics, and new seminarians are 
being trained locally. The new freedoms have allowed many 
other religious groups to proselytize and recruit members. 
Under conditions of economic and political uncertainty, their 
efforts are bearing fruit. Such denominations as the Baptists, 



128 



Latvia 



Pentecostals, and Seventh-Day Adventists have made significant 
inroads. Charismatic movements, animists, Hare Krishna, and 
the Salvation Army have all attempted to fill a void in Latvia's 
spiritual life. Undoubtedly, there is great interest among Latvi- 
ans in spiritual matters, but it is difficult to know how much of 
it is genuine and how much reflects the ebb and flow of fashion 
and will be replaced by other trends. 

Language and Culture 

The Latvian language, like Lithuanian, belongs to the Baltic 
branch of the Indo-European family of languages. Latvian is an 
inflective language, written in the Latin script and influenced 
syntactically by German. The oldest known examples of written 
Latvian are from catechisms published in 1585. Because of the 
heavy influx of ethnic Russians and other Slavs after World War 
II, nearly one-half of the country's population does not speak 
Latvian (see table 22, Appendix). Most ethnic Latvians speak 
Russian, however, and many also know German (see table 23, 
Appendix). 

Latvian culture is strongly influenced by folklore and by the 
people's attachment to their land. Christian rituals often are 
intermingled with ancient customs, and pagan geometric sym- 
bols remain evident in the applied arts. Ancient folksongs, or 
dainas, that were first collected and published in the mid-nine- 
teenth century, most notably by Krisjanis Barons, are a cultural 
treasure. In 1888 the great epic poem Lacplesis (Bear Slayer) by 
Andrejs Pumpurs was published, marking the dawn of modern 
Latvian literature. Janis Rainis (1865-1929) usually tops the list 
of Latvia's greatest writers. One of the most prominent figures 
in Latvian literature today is the poet Imants Ziedonis, who also 
has established a fund to promote the development of Latvian 
culture. 

Latvia has a number of theaters (mostly in Riga), an opera, a 
symphony orchestra, and a permanent circus. Riga's Dome 
Cathedral houses one of the largest and most famous organs in 
the world. The works of many prominent Latvian artists are dis- 
played at the National Fine Arts Museum and at the many art 
galleries in Riga. Other museums include the Museum of His- 
tory and Navigation and the Museum of Natural History. There 
are 168 public libraries in the capital. Books and periodicals 
are published in Latvian and in other languages. 



129 



Estonia, Latvia, and Lithuania: Country Studies 

Economy 

The Latvian economy, much like that of other former Soviet 
republics in the 1990s, is going through an extremely difficult 
period of adjustment and rapid change. Hence, all statistics 
and assessments are subject to dramatic change. 

Historical Legacy 

For Latvia and the other two Baltic republics, the period of 
development between 1920 and 1940 is regarded as a guide 
and a morale booster. Latvians know how wrenching the sud- 
den changes were after World War I. Russia had removed 
almost all factory equipment, railroad rolling stock, raw materi- 
als, bank savings, and valuables to the interior. Almost none of 
these assets were returned. With the victory of Stalin and the 
sealing of the Soviet Union to the outside world, Latvia had to 
change its entire pattern of trade and resource buying. In 
other words, the Russian market, which had been the basis of 
the manufacturing industry, was no longer accessible. More- 
over, the war had left deep demographic wounds and incalcula- 
ble material damage. In six years of continuous war, with front 
lines changing from year to year and even month to month, 
more than one-quarter of all farm buildings had been devas- 
tated; most farm animals had been requisitioned for army sup- 
plies; and the land had been lacerated by trenches, barbed 
wire, and artillery craters. Even trees retained the legacy of war; 
Latvian timber was dangerous for sawmills because of the heavy 
concentration of bullets and shrapnel. 

Independent Latvia received no foreign aid for rebuilding. 
On the contrary, it had to squeeze the low incomes of its popu- 
lation to repay war debts incurred by the troops fighting for 
Latvian independence. In spite of all these obstacles, the eco- 
nomic record of the twenty years is truly impressive. Latvia suc- 
cessfully effected agrarian reform and provided land for 
hundreds of thousands of the dispossessed. Many of these 
farmsteads pooled their resources through an extensive system 
of cooperatives that provided loans, marketing boards, and 
export credits. The currency was stabilized, inflation was low, 
unemployment was much better than in West European coun- 
tries even during the Great Depression years, and foreign debt 
was not excessive. Perhaps the most objective index of Latvia's 
economic status is evident from the 10.6 tons of gold that it 
placed in foreign banks before the invasion of the Red Army. 



130 



Latvia 



Most Latvians who remember the period consider it a golden 
era. Many of its successful economic approaches are being 
raised in debates today. 

The Soviet Period 

The half-century of Soviet occupation started with the 
expropriation without compensation of almost all private prop- 
erty by the state. Within a few years, farms, which had not been 
nationalized immediately, were forced into collectives in the 
wake of the deportation of more than 40,000 mostly rural 
inhabitants in 1949. For many decades, in the struggle between 
rationality and ideological conformity, or between the so-called 
"expert" and "red," the latter consideration usually prevailed. 

Between 1957 and 1959, a group of Latvian communist func- 
tionaries under Eduards Berklavs tried to reorient Latvia 
toward industries requiring less labor and fewer imports of raw 
materials. At this time, Pauls Dzerve, an economist and an aca- 
demician, raised the idea of republican self-accounting and 
sovereignty. The purges of 1959 replaced these experimenters, 
and Latvia continued in the race to become the most industri- 
alized republic in the Soviet Union, with a production profile 
that was almost wholly determined in Moscow. Latvia lost its 
ability to make economic decisions and to choose optimum 
directions for local needs. A broad-based division of labor, as 
seen by Moscow central planners, became the determining 
guide for production. This division of labor was highly extolled 
by the Soviet leadership of Latvia. For example, Augusts Voss, 
first secretary of the Communist Party of Latvia (GPL), summa- 
rized this common theme in 1978: "Today, nobody in the whole 
world, not even our opponents or enemies, can assert that the 
separate nations of our land working in isolation could have 
achieved such significant gains in economic and cultural devel- 
opment in the past few decades. The pooling of efforts is a 
powerful factor in increased development." The extolling of 
the virtues of a Soviet-style economy included an entire refrain 
of "self-evident truths," which were aimed at reinforcing the 
desire of Latvians not just to accept their participation in the 
division of labor within the Soviet Union but also to support it 
with enthusiasm. 

People in the West often underestimated the effectiveness of 
the Soviet propaganda machine. The media reinforced the 
popular images of the decadent and crumbling capitalist econ- 
omies by portraying scenes of poverty, bag ladies, racial ten- 



131 



Estonia, Latvia, and Lithuania: Country Studies 

sions, armies of the unemployed, and luxury dwellings in 
contrast to slums. The discovery by Russians, and especially by 
their elites, of the much more nuanced realities of the outer 
world were important incentives for change and even abandon- 
ment of communism. Before that discovery, though, the bar- 
rage of propaganda had considerable effect in Latvia. But 
other factors tended to mitigate or counter its impact. One of 
these was the collective memory of Latvia's economic achieve- 
ments during its period of independence. Another was the 
credible information about the outside world that Latvians 
received from their many relatives abroad, who began to visit 
their homeland in the 1960s. Twenty years later, many visitors 
from Latvia, often going to stay with relatives in the West, were 
able to see firsthand the life-styles in capitalist countries. Dur- 
ing this period of awakening, the argument was clearly made 
and understood: if Latvia had remained independent, its stan- 
dard of living would have been similar to that of the Baltic 
states' northern neighbor, Finland, a standard that was obvi- 
ously significantly higher than that of Latvia. 

By the late 1980s, the virtues of a division of labor within the 
Soviet Union were no longer articulated even by the CPL lead- 
ership. Together with the communist leaders in the other Bal- 
tic republics, the CPL leaders desired to distance themselves 
from a relationship that they were beginning to see as exploit- 
ative. Thus, on July 27, 1989, Latvia passed a law on economic 
sovereignty that was somewhat nebulous but whose direction 
was clear — away from the centralizing embrace of Moscow. 

The shift toward Latvian control of the economy can be seen 
from the changes in jurisdiction between 1987 and 1990. 
Although the percentage of the Latvian economy controlled 
exclusively by Moscow remained about the same (37 percent), 
the share of the economy controlled jointly declined from 46 
to 21 percent, and the share exclusively under Latvia's jurisdic- 
tion increased from 17 to 42 percent during this period. 

The Soviet division of labor entailed, in the Latvian case, sig- 
nificant imports of raw materials, energy, and workers, as well 
as exports of finished products. Exports as a proportion of the 
gross national product (GNP — see Glossary) accounted for 50 
percent in 1988, a level similar to that of ten of the other 
republics but not Russia, which had only a 15 percent export 
dependency. After the disintegration of the Soviet Union, ris- 
ing energy prices and the lifting of price controls on many 
Latvian goods often made them too expensive for the markets 



132 



Latvia 



of the former Soviet Union, but the technological inferiority of 
these goods limited their marketability in the West (see Postin- 
dependence Economic Difficulties, this ch.). 

Economic Sectors 

During the postwar era, industry supplanted agriculture as 
the foremost economic sector. By 1990 industry accounted for 
almost 43 percent of the gross domestic product (GDP — see 
Glossary) and for more than 30 percent of the labor force (see 
table 24, Appendix). Aggressive industrialization and forced 
relocation of labor, particularly in the 1950s and 1960s, 
reduced agriculture's share of the labor force from 66 percent 
in 1930 to about 16 percent in 1990. Agriculture accounted for 
20 percent of GDP in 1990; transportation and communica- 
tions, about 8 percent; construction, less than 6 percent; and 
trade, services, and other branches, about 20 percent. 

Industry 

In 1990, 38.9 percent of all industrial personnel in Latvia 
were employed by the engineering industry (including 
machine building and electronics) and 17 percent by the tex- 
tile industry. Other important industries included food (12.7 
percent), wood and paper (9.6 percent), chemicals (5.7 per- 
cent), and building materials (4.6 percent). Latvia, the most 
industrialized Baltic state, accounted for all electric and diesel 
trains produced in the Soviet Union, more than one-half of the 
telephones, and more than 20 percent of the automatic tele- 
phone exchanges, refrigeration systems, and buses. 

Because of its deficiency in natural resources, Latvia relies 
heavily on imports of fuels, electric power, and industrial raw 
materials. Energy is generated domestically by three hydroelec- 
tric power plants on the Daugava River, which have a total 
capacity of 1,500 megawatts, and by two thermal power plants 
near Riga, which have a total capacity of 500 megawatts (see fig. 
9). In 1991 about 43 percent of total electricity consumed was 
imported from neighboring states. The country's natural 
resources are primarily raw construction materials, including 
dolomite, limestone, clay, gravel, and sand. 

Agriculture 

In 1990 Latvia had 2,567,000 hectares of agricultural land, 
32 percent less than in 1935. More than 1 million hectares of 
agricultural land, much of it abandoned, were converted to for- 



133 



Estonia, Latvia, and Lithuania: Country Studies 







— International boundary 


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National capital 


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25 50 Kilometers 





25 50 Miles 



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ESTONIA / Yr 

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' Thermal power plant 




Textiles 




Chemicals 


O Hydroelectric power plant 


Q 


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Figure 9. Economic Activity in Latvia, 1995 



est under Soviet rule. Of its nearly 1.7 million hectares of ara- 
ble land, about one-half was used for growing fodder crops, 
more than 40 percent for grain, 5 percent for potatoes, and 
approximately 2 percent for flax and sugar beets together. 

The Soviet authorities socialized agriculture, permitting only 
small private plots and animal holdings on the vast state and 
collective farms. By 1991, when Latvia regained its indepen- 
dence, a network of more than 400 collective farms, with an 



134 



Latvia 



average size of almost 6,000 hectares, and more than 200 state 
farms, averaging about 7,300 hectares in size, had been cre- 
ated. Private household plots, despite their small size (0.5 hect- 
are, maximum), played a significant role in the agricultural 
sector by supplementing the output of the notoriously ineffi- 
cient state and collective farms. In 1991 some 87 percent of all 
sheep and goats were held on private plots, as were approxi- 
mately 33 percent of dairy cows and more than 25 percent of 
cattle. 

Under Soviet rule, Latvia became a major supplier of meat 
and dairy products to the Soviet Union. From 1940 to 1990, 
livestock production nearly doubled; by contrast, crop cultiva- 
tion increased by only 14 percent, despite major investments in 
soil drainage and fertilization projects. In 1990 Latvia exported 
10 percent of its meat and 20 percent of its dairy products to 
other Soviet republics, in return for which it obtained agricul- 
tural equipment, fuel, feed grains, and fertilizer. As the central- 
ized Soviet system collapsed, however, a shortage of feed and 
the rising costs of farm equipment took a toll. From 1990 to 
1991, the number of animals on state and collective farms in 
Latvia fell by up to 23 percent. Consequently, the output of 
meat, milk products, and eggs from these farms declined by 6 
to 7 percent (see table 25, Appendix). 

Transportation and Telecommunications 

Transportation is a relatively small but important branch of 
Latvia's economy. The infrastructure is geared heavily toward 
foreign trade, which is conducted mainly by rail and water. 
Roads are used for most domestic freight transport. 

In 1992 Latvia had 2,406 kilometers of railroads, of which 
270 kilometers were electrified. The railroads carried 31.8 mil- 
lion tons of freight and 83.1 million passengers. Most railcars 
are old, with some having been in service for twenty or more 
years. Train service is available to Moscow, St. Petersburg, and 
Warsaw. 

Of the 64,693 kilometers of public roads, 7,036 kilometers 
were highways or national roads and 13,502 kilometers were 
secondary or regional roads in 1994. Latvia had a fleet of 
60,454 trucks and 11,604 buses; private passenger automobiles 
numbered 367,475. Many, if not most, trucks were more than 
ten years old. Despite the growing number of automobiles, 
commuters continued to rely mainly on trains and buses, each 
of which accounted for 5 billion to 6 billion passenger-kilome- 



135 




Figure 10. Transportation System of Latvia, 1995 



ters per year in the early 1990s. Bus service was provided 
between Riga and Warsaw 

Latvia's location on the Baltic Sea has provided the country 
with one of its major economic moneymakers for the future. 
The three large seaports of Riga, Ventspils, and Liepaja are par- 
ticularly promising for future trade because they can be used 
during all seasons and because a dense network of railroads 
and roads links them with many of the landlocked regions of 
neighboring countries (see fig. 10). For many years, Riga was 
the end point for Japanese container traffic originating in the 
Russian Far East, primarily the port of Nakhodka. This traffic 
was mostly unidirectional from east to west. With the expected 
opening up of Japan to incoming world trade, however, Euro- 
pean exporters may find that Riga is the best route for their 
containers bound for Japan or even China. 



136 



Latvia 



Ventspils is the end terminal for a Volga Urals crude oil pipe- 
line built in 1968. Its port has the capacity to service three large 
ocean tankers simultaneously. The American Occidental Petro- 
leum Company constructed an industrial chemical complex 
there providing for the processing and export of raw materials 
coming from Russia and Belarus. 

The port of Liepaja has not yet been involved in major eco- 
nomic activity because until May 1992 it was still in the hands of 
the Russian armed forces. The port, which ranks as one of the 
Baltic Sea's deepest, was restricted for many decades because of 
its military orientation. Much capital investment will be 
required to adapt this port for commercial use. With careful 
development, Liepaja could become an active commercial 
port. A dozen or so smaller ports that have been used mainly 
for fishing vessels could also be exploited for the distribution of 
commercial products. 

Riga, Ventspils, and Liepaja together handled about 27.2 
million tons of cargo in 1993. That year 16.3 million tons of 
petroleum exports from Russia passed through Ventspils, one 
of the former Soviet Union's most important ports. Grain 
imports account for most of the freight turnover at the port of 
Riga, also a Baltic terminus of the petroleum pipeline network 
of the former Soviet Union. Liepaja, a former Soviet naval 
port, became a trade port in the early 1990s. Also during this 
period, steps were taken to privatize the Latvian Shipping Com- 
pany, formally separated from the former Soviet Union's Minis- 
try of the Maritime Fleet. The Maras Line, a joint venture with 
British interests, began to operate between Riga and Western 
Europe. Latvia's fleet consisted of ninety-six ships, totaling 
nearly 1.2 million deadweight tons: fourteen cargo, twenty- 
seven refrigerated cargo, two container, nine roll-on/roll-off, 
and forty-four oil tanker vessels. 

The country's main airport is in Riga. Latvian Airlines, the 
national carrier, provides service to Copenhagen, Diisseldorf, 
Frankfurt, Helsinki, Kiev, Minsk, Moscow, St. Petersburg, and 
Stockholm. Baltic International Airlines, a joint Latvian-United 
States company, operates flights to Frankfurt and London. Ser- 
vice to Oslo, Berlin, and Amsterdam is offered by Riga Airlines 
Express, a joint venture between two Latvian joint-stock compa- 
nies and a Swiss enterprise. Other carriers include Finnair, 
Lufthansa, SAS (Scandinavian Airlines), LOT (Polish Airlines), 
and Estonian Air. 



137 



Estonia, Latvia, and Lithuania: Country Studies 

The country's telecommunications network is undergoing 
reconstruction as a result of the privatization of the telecom- 
munications system in 1993 and the sale of a 49 percent share 
to a British-Finnish telecommunications consortium in 1994. A 
new international automatic telephone exchange was installed 
in Riga, and improved telephone and telegraph services 
became available at standard international rates. The long- 
term development plan of Lattelcom, the privatized telecom- 
munications company calls for the creation of a fully digitized 
network by the year 2012. In 1992 Lattelcom had about 
700,000 telephone subscribers, over half of whom were in Riga. 
Unmet demand because of a shortage of lines was officially 
190,000. The unofficial figure, that of potential customers not 
on the waiting list, was believed to be much larger. There were 
an estimated 1.4 million radio receivers and 1.1 million televi- 
sion receivers in use in 1992. By early 1995, Latvia had more 
than twenty-five radio stations and thirty television broadcast- 
ing companies. Radio programs are broadcast in Russian, 
Ukrainian, Estonian, Lithuanian, German, Hebrew, and other 
foreign languages. 

Foreign Trade 

In the early 1990s, Latvia succeeded only partially in reori- 
enting foreign trade to the West. Russia continued to be its 
main trading partner, accounting for nearly 30 percent of the 
country's exports and more than 33 percent of its imports in 
1993 and for about 28 percent of its exports and nearly 24 per- 
cent of its imports in 1994. Overall, more than 45 percent of 
Latvia's exports were destined for the former Soviet republics 
(mainly Russia, Ukraine, and Belarus), and about 38 percent of 
its imports came from the former Soviet Union in 1993. 
Among Western countries, the Netherlands received the larg- 
est volume of Latvia's exports (8.2 percent), followed by Ger- 
many (6.6 percent) and Sweden (6.5 percent). The primary 
sources of imports from the West were Germany (11.6 percent) 
and Sweden (6.2 percent). 

The main import was oil, followed by natural gas, machinery, 
electric power, and automobiles. Oil products, wood and tim- 
ber, food products, metals, and buses were the main exports 
(or, in the case of oil products and metals, reexports). In 1994, 
according to Western estimates, Latvia's foreign trade deficit 
was LVL141.1 million, about three times higher than that in 
1993. The balance of trade deteriorated in 1994, particularly 



138 



Latvia 



because the strength of the lats made Latvia's exports too 
expensive. 

A total of about US$73 million in humanitarian aid was 
received in 1992. (Reliable estimates of total aid flows in 1993 
were unavailable.) In 1993 Latvia received aid in the amount of 
ECU18 million (for value of the European currency unit — see 
Glossary) from the European Union (see Glossary) through its 
Poland/Hungary Aid for Restructuring of Economies 
(PHARE) program. Of a US$45 million import rehabilitation 
loan from the World Bank (see Glossary), about US$21 million 
had been used in 1993. In 1994 the European Investment Bank 
(EIB) granted loans of US$6.4 million for financing small- and 
medium-sized companies. For this purpose Latvia also received 
a US$10 million loan from Taiwan. In addition, Latvia obtained 
a US$100 million joint financing credit from the European 
Bank for Reconstruction and Development (EBRD) and the 
Export-Import Bank of Japan. 

Postindependence Economic Difficulties 

The Latvian economy began to falter in 1991 and took a 
nosedive in 1992. Industrial production declined by 31 percent 
in 1993, a relative improvement compared with the previous 
year's decline of 35 percent. Especially hard hit was the engi- 
neering industry, which was not able to sell most of its produc- 
tion. By January 1994, the official unemployment rate had 
reached a high of 5.9 percent. (The actual rate of unemploy- 
ment, including the long-term unemployed, approached 14 
percent.) 

International trade also plummeted. Most of the trade with 
the former Soviet republics is conducted using world prices. 
One of the key areas of change is in the price of energy, which 
increased seventy-five times between 1990 and 1992. The aver- 
age prices of imports in these two years increased forty-five 
times, whereas prices of exports increased only about thirty- 
three times. With such price hikes and the general economic 
chaos prevailing in the whole post-Soviet region, exports in the 
1990-92 period decreased by 44 percent, imports by 59 per- 
cent, and energy imports by 52 percent. Despite moderate 
improvement in 1993, Latvia continued to face the challenge 
of modernizing its production equipment and improving the 
quality and qualifications of its work force. To do that, it 
needed international credit and investment. Foreign invest- 
ment, estimated to be about US$130 million in November 



139 



Estonia, Latvia, and Lithuania: Country Studies 

1993, was still small, mainly because of political uncertainty. 
The greatest influx of foreign investment was from Germany 
(US$31 million), followed by the United States, Sweden, Rus- 
sia, Switzerland, and Austria. 

There is, nonetheless, evidence of considerable progress in 
economic reform. In 1991 most, or 88.2 percent, of Latvian 
exports went to the former Soviet Union, and 3.2 percent went 
to Western countries. One year later, more than 20 percent of 
exports went to the West. In 1993 West European countries 
accounted for about 25 percent of Latvia's exports and 17 per- 
cent of its imports. Moreover, there has been a positive shift in 
the distribution of economic sectors, away from industry and 
toward services. By 1994 the services sector accounted for more 
than 50 percent of Latvia's GDP; industry, about 22 percent; 
and agriculture, 15 percent. Another major achievement has 
been in the stabilization of the Latvian currency. Latvia used 
the Russian ruble as legal tender until May 7, 1992, when it 
introduced the Latvian ruble as a coequal currency. On July 20, 
it made the Latvian ruble the sole official mode of payment. 
On March 5, 1993, the new Latvian currency, the lats, was intro- 
duced to be used with the Latvian ruble. The lats became the 
sole legal tender in October 1993. The Bank of Latvia has scru- 
pulously followed the directions of the International Monetary 
Fund (IMF — see Glossary) by restricting the printing of money 
and credits. By strictly controlling the money supply, it was able 
to wrestle inflation down to 2.6 percent in December 1992 and 
to keep it at an average of less than 3 percent a month through 
December 1993. The annual inflation rate was reduced from 
more than 958 percent in 1992 to 35 percent in 1993 and 28 
percent in 1994. 

In Latvia, as in Russia, managers of state-owned production 
plants pressed the government through early 1992 to increase 
credits, but failed. The strength of the Latvian currency has 
contributed to price increases, making it difficult to export 
Latvian products to the former Soviet Union. Exporters called 
for a devaluation of the currency and a lowering of interest 
rates. Despite low inflation and a strong currency, annual inter- 
est rates exceeded 100 percent, making it difficult for enter- 
prises to obtain loans. 

It is indicative of the struggles waged by different sectors of 
the economy, state structures, and other institutions that the 
1993 state budget was introduced and accepted only in Febru- 
ary 1993. At almost 29 percent, the biggest item in the pro- 



140 



Traffic in downtown Riga 
Courtesy Chester Pavlovski 



141 



Estonia, Latvia, and Lithuania: Country Studies 

jected budget was pensions. Unpaid taxes and unanticipated 
expenditures on pensions and other social benefits that year 
contributed to a deficit of LVL54 to LVL55 million (3.2 percent 
of GDP). To raise additional revenue, the value-added tax 
(VAT — see Glossary) was increased from 12 percent to 18 per- 
cent in November. In December the government also began to 
issue short-term promissory notes. The budget crisis abated in 
1994, with an estimated deficit of LVL36.7 million (1.6 percent 
of estimated GDP). According to the Economist Intelligence 
Unit, with a projected revenue of LVL476 million and expendi- 
tures of LVL516 million the 1995 budget would run a deficit of 
about LVL40 million (1.5 percent of estimated GDP). 

Privatization 

One of the most difficult aspects of economic reform in 
Latvia is the process of privatization. By the end of 1992, only 
six out of the more than 2,000 state-run enterprises had been 
privatized. Of the 703 enterprises slated for privatization in 
1993, only nineteen had been privatized by mid-October. An 
agency charged with the privatization of enterprises was not 
established until November 1993. By January 1994, about thirty 
state-owned firms had been sold. It had been widely assumed 
that Latvia would be one of the leaders in privatization because 
of its experience with a market economy as an independent 
state from 1920 to 1940 and because of a latent antipathy to 
communism. Many factors have hindered the privatization pro- 
cess, however. 

Until the early 1990s, no major initiatives in this realm could 
be made because of unclear jurisdiction. As early as 1990, Mos- 
cow had prepared a privatization plan for Latvia, which 
assigned 51 percent of the shares of industries to their workers, 
with the remainder to be divided between Latvia and the rest of 
the Soviet Union. Such a move was vetoed by Latvia. One of the 
primary reasons for the slow pace of privatization was the 
attempt to honor the claims of previous owners or their descen- 
dants. The right to make such claims was extended to the end 
of 1993. By January 1, 1993, there had been 14,958 requests for 
buildings, of which only 2,614 had been reviewed. In addition, 
more than 10,000 apartments had been denationalized, and 
more than 50,000 claims to city land had been received. A 
number of owners have been reluctant to make early claims 
because they would be liable for large costs, especially in build- 
ings with high tax, heating, lighting, and repair bills. Mean- 



142 



II 




*4 ~ 




iftga Airport 
Courtesy Juris Ubans 
Coal-loading area at the port in Riga 



143 



Estonia, Latvia, and Lithuania: Country Studies 

while, rents have been strictly controlled, and tenants cannot 
be evicted for seven years unless an equivalent apartment is 
provided elsewhere. 

Potential private owners reclaiming their rightful properties 
face other obstacles as well. There are legal confrontations 
between previous owners and a variety of squatters or other 
claimants. Before independence, many properties were leased 
or sold to cooperatives. Property law in Latvia has a curious 
clause that allows so-called 'jurisdictional persons" to keep 
their contracts or properties if the acquisitions were made out 
of ignorance or "goodwill." In most of these cases, the former 
owner is then granted compensation by the state, which is usu- 
ally a small fraction of the worth of a property. 

An important psychological aspect of privatization is that 
many Latvian citizens are afraid of selling off Latvia for a pit- 
tance. On the one hand, a belief widely held by leftists — former 
communists — is that the IMF is trying to wreck the Latvian 
economy in order to lower purchase prices for foreign firms. 
On the other hand, rightists charge that the old managers are 
sabotaging production to lower the value of firms and allow 
themselves and their Moscow-based mafia allies to once again 
dominate the Latvian economy. Of particular note is the wide- 
spread belief among ethnic Latvians that the main beneficia- 
ries of privatization will be non-Latvians. There is a common 
perception that about 80 percent of private economic activity is 
in the hands of other ethnic groups. In private interviews, 
many reasons are given for this economic breakdown: other 
groups are more active and willing to take risks; they have bet- 
ter contacts in the old party nomenklatura (see Glossary); they 
have more links with organized crime; they live mostly in cities 
where the economic action is; and business has not tradition- 
ally been highly regarded in Latvian culture. The predomi- 
nantly Latvian state bureaucracy, which can affect the rate of 
privatization, is afraid of losing its power and the concomitant 
benefits involved in the control of industries. 

As in other formerly socialist states, there has been an innate 
difficulty in estimating the value of industries or buildings. An 
auction could help overcome this problem, but other consider- 
ations, such as job retention and the ability of different bidders 
to compete in future markets, have become important. In 
effect, only 9.5 percent of the 295 privatization sales held in 
Latvia by January 1, 1993, had been accomplished through auc- 
tion. Most of the privatization undertakings were bids to lease 



144 



Latvia 



commercial sales establishments for up to five years. In most 
cases, the leasing of commercial sales establishments requires 
that the newly private entrepreneurs continue the same line of 
business as before. Even this kind of relatively mundane trans- 
action was plagued by jurisdictional squabbles. For example, in 
the lease of the Minsk, one of the largest department stores in 
Riga, it was discovered after the contract had been signed that 
the city district that organized the lease had no right to do so 
because the Minsk is actually under the jurisdiction of the city 
of Riga. This case illustrates just one problem such initiatives 
can engender. There were also public charges about favoritism, 
the involvement of family members of the Cabinet of Ministers, 
the undervaluation of existing stock, and so on. 

A few foreign investors had started up new firms or enter- 
prises, but initial investments were cautiously small — in most 
cases well below US$1 million. In 1992, for example, total capi- 
tal investments involving United States enterprises amounted 
to less than US$13 million. The many problems slowing down 
foreign investment include the limited title to land (at best a 
ninety-nine-year lease); the unreliability of contracts with gov- 
ernment representatives or ministries, which can be broken; 
the expectation in some instances of favors or bribes by govern- 
ment contracting or signing parties; the presence of organized 
crime and, in some localities, its demands for protection 
money; the widely reported stealing and pillaging of private 
property; and the variable quality of workers. Other problems 
involve communications difficulties, a dearth of adequate 
housing for Western staff, the deficit in knowledge of foreign 
business language, the lack of Western-trained management, 
and even the question of safety in the streets. These problems 
are also reflected in other former Soviet republics. Latvia 
appears to be tackling them with vigor and determination, 
however, and major improvements in the investment climate 
have already been achieved. 

Until 1993 one of the key variables blocking a resurgence in 
economic activity was the erratic and unstable local banking 
and financing system. More than forty banks in Latvia had an 
average capitalization of less than US$1 million. Interest rates 
varied considerably, and services had yet to meet Western stan- 
dards. The Bank of Latvia, which is the country's central bank, 
operated forty-eight branches and a specialized foreign 
branch. 



145 



Estonia, Latvia, and Lithuania: Country Studies 

Although much remains to be done, some progress has been 
made in reforming the financial sector, particularly in privatiz- 
ing commercial operations. Twenty-one former branches of 
the Bank of Latvia were merged in 1993 to establish the Univer- 
sal Bank of Latvia, the privatization of which was to be com- 
pleted in 1995. The Latvian Savings Bank also was to be 
restructured and privatized by the end of 1995. As the central 
bank, the Bank of Latvia assumed a supervisory role, guiding 
and monitoring the country's banks. To facilitate payments, 
many banks have joined the Society of Worldwide Interbank 
Telecommunication (SWIFT), the international fund transfer 
system, and some have begun to offer credit cards, cash 
advances, and other services. 

Progress toward privatization has been made in agriculture 
as well. By January 1, 1993, some 50,200 farmsteads encompass- 
ing 21 percent of farmland had been given over to individual 
ownership. By late 1993, the number of private farms had 
grown to 57,510, compared with 3,931 at the end of 1989 (see 
table 26, Appendix) . At the same time, another 99,400 families 
were assigned private plots averaging 4.4 hectares, which pro- 
vided a significant buttress to their economic survival. The 
major thrust for this privatization came from the program of 
denationalization, which returned farms and land to former 
owners or their relatives. Aspects of this privatization could 
cause problems in the future, however. Although imbued with 
idealistic expectations, the new farmers have little equipment 
and inadequate housing for themselves and their animals. Also, 
many of them have never farmed before. Their farms are usu- 
ally small, averaging seventeen hectares each. Not all collective 
farms were dismembered, but where they did split up, the lead- 
ership of these farms was able in many instances to buy out 
equipment and animals at preinflation prices. This apparent 
unfairness has left a legacy of bitterness. 

In November 1992, a law providing vouchers for privatiza- 
tion was passed. The law came into effect on May 1, 1993, and 
the distribution of vouchers began in September. The law pro- 
vides for the distribution of vouchers according to one's length 
of residence in Latvia, with one year worth one voucher, or 
about US$42. Other factors are also taken into account. For 
example, those who can lay claim to Latvian citizenship prior 
to the Soviet occupation in June 1940 and their progeny are 
entitled to an additional fifteen vouchers as compensation for 
so-called "ancestral investments." Refugees who left Latvia 



146 



Latvia 



because of World War II may also obtain one voucher for each 
year lived in Latvia before December 31, 1944. Those forcibly 
deported from Latvia in the past receive a differentiated num- 
ber for each year of confinement in prison camps or in exile. 
Finally, people are allotted vouchers on those occasions where 
private claims on property cannot be realized because of con- 
flicts with squatters or because compensation is chosen in lieu 
of property. An estimated 87 percent of vouchers are to be 
granted to Latvian citizens. Of the total of 113 million vouchers 
in circulation, an estimated 2 million are expected to be used 
for purchasing farmland, 40 million for city land, 43 million for 
apartments, and 28 million for state enterprises. 

Public opinion is an important consideration in policy mak- 
ing. Popular attitudes toward privatization differ somewhat 
between Latvians and others but not between men and women 
or between urban and rural areas. A random poll revealed the 
greatest split between individuals thirty-four years and younger 
and those thirty-five and older, and this difference may por- 
tend increased support for privatization. 

Consumption Patterns 

One of the main effects of the 1991-92 economic changes 
and dislocations has been a change in the pattern of consump- 
tion. According to family budget studies, food claimed only 
29.4 percent of expenditures in 1990 but rose to 37.8 percent 
in 1991 and to 48.8 percent in 1992 (January-September). (In 
the United States, an average of 15 percent of income goes to 
food purchases.) The share of other commodities in the bud- 
get decreased from 37.6 percent in 1990 to 24.1 percent in 
1992. Services, taxes, and other expenses declined only mar- 
ginally as a proportion of total spending. 

In the third quarter of 1992, the average monthly wage was 
5,054 Latvian rubles, and the minimum wage was set at 1,500. 
According to the calculations of the Ministry of Welfare, the 
minimum "crisis survival basket" was determined to cost 3,010 
Latvian rubles, and a minimum noncrisis basket of food and 
services cost 4,120 Latvian rubles. To purchase one kilogram of 
beef in September 1992, a person employed in the state sector 
had to work 180 minutes; for one kilogram of pork, 309 min- 
utes; one liter of milk, thirty-six minutes; ten eggs, 110 minutes; 
one kilogram of sugar, 159 minutes; a man's suit, ninety-four 
hours; a man's shirt, 520 minutes; one pair of men's socks, fifty- 
two minutes; one pair of pantyhose, 110 minutes; and a pair of 



147 



Estonia, Latvia, and Lithuania: Country Studies 

women's shoes, twenty-four hours. The price of one kilogram 
of bread was equivalent to 15 percent of a day's wages. 

The decrease in real wages and the increase in the cost of 
goods resulted in a decrease of 45 percent in retail sales 
between January and September 1991. The volume of pur- 
chases of many items decreased by well over 50 percent. 

However, retail sales do not reflect total consumption. Many 
individuals started their own garden patches; relatives availed 
themselves of their farm connections; and farmers, of course, 
grew their own food and exchanged it for other goods and ser- 
vices. A survey of family budgets found that in comparing the 
first nine months of 1991 and 1992, meat consumption de- 
creased by 13 percent, milk and milk products by 18 percent, 
fish and fish products by 24 percent, and sugar by 19 percent. 
Bread products consumption increased by more than 10 per- 
cent, however. Total calorie intake decreased by 5.9 percent, 
and fat intake fell by 11 percent. 

Although the purchase of new manufactured goods de- 
creased significantly, there is still a considerable availability of 
household goods likely to last well into the 1990s. In 1991, for 
example, for every 100 families there were 143 radios, 110 tele- 
visions, ninety-nine refrigerators, eighty-nine washing ma- 
chines, seventy vacuum cleaners, and thirty-seven automobiles. 

Government and Politics 

Transition to Independence 

The decision of the Latvian Supreme Soviet in December 
1989 to end the communist party's monopoly on political 
power in Latvia cleared the way for the rise of independent 
political parties and for the country's first free parliamentary 
elections since 1940. Of the 201 deputies elected to the new 
Supreme Council, the transitional parliament, in March and 
April 1990, only fifteen had served in any of the previous Soviet 
Latvian legislative assemblies, and about two-thirds belonged to 
the proindependence Popular Front of Latvia (see Historical 
Setting, this ch.). 

On May 4, 1990, a declaration renewing the independence 
of the Republic of Latvia was adopted by the Supreme Council. 
A de facto transition period for the renewal of independence 
was to culminate in elections to a restored Saeima (Latvia's pre- 
1940 legislature). The Supreme Council declared the Soviet 
annexation of Latvia illegal and restored certain articles of the 



148 



Latvia 



constitution of February 15, 1922, pertaining to the election of 
the Saeima and to Latvia's status as an independent and demo- 
cratic state whose sovereign power rests with the Latvian peo- 
ple. 

To pass this declaration, according to Soviet Latvian law, it 
was necessary to have at least a two-thirds majority of the total 
number of deputies — 134 out of 201. The vote was close, but 
the declaration passed with 138 votes. The Russophone Ravno- 
praviye (Equal Rights Movement) boycotted this resolution by 
walking out of parliament. 

On August 21, 1991, in an emergency session following the 
Soviet coup in Moscow, the Supreme Council declared Latvia's 
full independence, ending the transition period. Several parts 
of the May 4, 1990, declaration, however, were not affected. Of 
particular importance was the inaction on the creation of a 
revised constitution to reflect "new" realities. A particularly vig- 
orous opposition to this clause was mounted by the Latvian Cit- 
izens' Committee (Latvijas Pilsonu Komiteja), which was op- 
posed to the legitimacy of the newly elected Supreme Council 
and did not see how an illegitimate body could create a legiti- 
mate new constitution. The committee fought to retain the 
entire package of the 1922 constitution without any amend- 
ments. Its initiative was endorsed by numerous deputies within 
the Popular Front of Latvia, who were so opposed to any com- 
promises on this issue that they created a separate parliamen- 
tary faction called Satversme (Constitution). Their reluctance 
to tamper with the 1922 constitution and the basics of the 1918 
republic extended to a refusal to change Latvia's electoral law, 
which technically was not even part of the constitution. Minor 
changes in the electoral law were accepted, however, including 
the right to vote at age eighteen. 

In view of the fact that elections to the Supreme Council 
were competitive and democratic, why was there so much 
opposition to the right of this council to deal with constitu- 
tional questions? The elections in 1990, critics said, were still 
held in occupied Latvia in accordance with the rules agreed 
upon by the communist-led Supreme Soviet of Latvia. One of 
the greatest points of contention was participation by the 
Soviet army, which refused to provide for any valid enumera- 
tion of voters and was allowed to vote using different rules 
from the rest of the population. Many of the opponents also 
contended that, according to international law, people who 
were resettled in an occupied territory had no automatic right 



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Estonia, Latvia, and Lithuania: Country Studies 

to citizenship or the right to vote. Thus, only those with Latvian 
citizenship prior to Soviet occupation on June 17, 1940, and 
their progeny were entitled to determine Latvia's future. This 
point of view prevailed in the determination of the electorate 
for the June 5-6, 1993, elections to the restored Saeima. About 
25 percent of the permanent residents of Latvia, mainly ethnic 
Russians, were not allowed to vote in those elections. 

Political System 

The current electoral system is based on that which existed 
in Latvia before its annexation by the Soviet Union. One hun- 
dred representatives are elected by all citizens at least eighteen 
years of age, on the basis of proportional representation, for a 
period of three years. The Saeima elects a board, consisting of 
a chairman, two deputies, and two secretaries. The chairman 
or a deputy acts as speaker of the legislature. By secret ballot, 
the Saeima also elects the president, who must be at least forty 
years of age and have an absolute majority of votes. The presi- 
dent then appoints the prime minister, who nominates the 
other cabinet ministers. The entire Cabinet of Ministers must 
resign if the Saeima votes to express no confidence in the 
prime minister. 

The Saeima has ten permanent committees with a total of 
100 positions, so every deputy may sit on one committee. 
There are five other committees with a total of thirty-four posi- 
tions. Committee chairmen, elected by committee members, 
often belong to minority parties not represented in the Sae- 
ima's ruling coalition. Draft laws for consideration by the Sae- 
ima may be submitted by its committees, by no fewer than five 
representatives, by the Cabinet of Ministers, by the president, 
or, in rare instances, by one-tenth of all citizens eligible to vote. 

The president is elected for a period of three years and may 
not serve for more than two consecutive terms. As head of state 
and head of the armed forces, the president implements the 
Saeima's decisions regarding the ratification of international 
treaties; appoints Latvia's representatives to foreign states and 
receives representatives of foreign states in Latvia; may declare 
war, in accordance with the Saeima's decisions; and appoints a 
commander in chief in time of war. The president has the right 
to convene extraordinary meetings of the Cabinet of Ministers, 
to return draft laws to the Saeima for reconsideration, and to 
propose the dissolution of the Saeima. 



150 



Latvia 



Latvia's judicial system, inherited from the Soviet regime, is 
being reorganized. There are regional, district, and administra- 
tive courts as well as a Supreme Court. Final appeals in criminal 
and civil cases are made to the Supreme Court, which sits in 

Riga- 
Latvia's four provinces (Vidzeme, Latgale, Kurzeme, and 
Zemgale) are subdivided into twenty-six districts, seven munici- 
palities, fifty-six towns, and thirty-seven urban settlements. The 
highest decision-making body at the local level of government 
is the council, elected directly by the locality's permanent pop- 
ulation for five-year terms and consisting of fifteen to 120 mem- 
bers. Members elect a board, which serves as the council's 
executive organ and is headed by the council chairman. In May 
1994, in their first local elections since regaining indepen- 
dence, Latvian citizens elected more than 3,500 representa- 
tives, most belonging to right-of-center, pro-Latvian-rights 
parties and organizations. Candidates from the Latvian 
National Independence Movement were the most successful, 
and those from organizations succeeding the once-dominant 
Communist Party of Latvia fared worst. 

Current Politics 

More than twenty political parties or coalitions contended 
for seats in the June 1993 general elections, including Latvia's 
Way (Latvijas Cels), the Popular Front of Latvia, the Latvian 
National Independence Movement, Harmony for Latvia, the 
Latvian Democratic Labor Party, the Latvian Farmers Union, 
the Latvian Social Democratic Workers' Party, the Green Party, 
and Ravnopraviye. Latvians who fled as refugees to the West 
during World War II were granted the right to vote, even if they 
had become citizens of other countries. Of the estimated 
120,000 such emigres, however, barely 10,000 had bothered to 
register by May 1993. 

With 32.4 percent of the vote, Latvia's Way, a centrist coali- 
tion founded three months before the election, won the largest 
number of seats — thirty-six. It succeeded in uniting a wide 
range of prominent advocates of democratization, a free-mar- 
ket economy, and closer cooperation among the Baltic states. 
The Latvian National Independence Movement, which was fur- 
ther to the right on the political spectrum, won fifteen seats; 
the moderate-left Harmony for Latvia, which took a liberal 
stance toward the issue of citizenship, won thirteen seats; and 
the center-right Latvian Farmers Union won twelve seats. Four 



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Estonia, Latvia, and Lithuania: Country Studies 

smaller groups — Ravnopraviye, the Fatherland and Freedom 
Union, the Christian Democratic Union, and the Democratic 
Center Party (subsequently renamed the Democratic Party) — 
won fewer than ten seats each. The Popular Front of Latvia, 
despite its large following before independence, fell short of 
the 4 percent threshold required for representation. 

At the start of its first session in July 1993, the Saeima's major 
acts included election of Anatolijs Gorbunovs of Latvia's Way as 
its chairman, full restoration of the 1922 constitution, and elec- 
tion of a president. Three candidates ran for president: Gunars 
Meirovics of Latvia's Way, Aivars Jerumanis of the Christian 
Democratic Union, and Guntis Ulmanis of the Latvian Farmers 
Union. Ulmanis succeeded in gaining the necessary majority 
vote on the third ballot and was inaugurated as president on 
July 8, 1993. He appointed Valdis Birkavs, a leader of Latvia's 
Way, as prime minister and asked him to form a government. 
The Cabinet of Ministers approved by the Saeima on July 20, 
1993, was a coalition of members of Latvia's Way, the Latvian 
Farmers Union, and the Christian Democratic Union. 

In July 1994, as a result of a dispute regarding tariffs on agri- 
cultural imports, the Latvian Farmers Union withdrew from 
the ruling coalition, and the Birkavs government resigned. 
Andrejs Krastins, deputy chairman of the Saeima and chair- 
man of the Latvian National Independence Movement, failed 
to form a new government. Then Maris Gailis of Latvia's Way 
engineered a coalition with two groups that emerged from a 
split in the Harmony for Latvia movement — the National 
Union of Economists, which advocates an expanded economic 
role for the state and greater concessions on citizenship rights 
for the Russians and other ethnic minorities, and Harmony for 
the People. In September the Gailis government, including 
Birkavs as foreign minister, was confirmed. 

One of the most important issues facing the Saeima was citi- 
zenship. Proposals concerning a citizenship bill ranged from 
retaining the citizenship criteria used for the purposes of the 
1993 general elections to granting automatic citizenship to all 
residents of Latvia. A citizenship bill was passed in June 1994, 
despite its controversial quota restricting naturalization to 
fewer than 2,000 people per year. Under heavy domestic and 
international pressure, however, the Saeima relented, and 
another citizenship bill, without the quota provision, was 
passed in July and signed into law by President Ulmanis in 
August. It requires that applicants have a minimum of five years 



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Latvia 



of continuous residence (in contrast to a December 1991 draft 
law's sixteen-year residency requirement); a rudimentary know- 
ledge of the Latvian language, history, and constitution; and a 
legal source of income. Applicants must also take an oath of 
loyalty to Latvia and renounce any other citizenship. 

Mass Media 

Beginning in 1985, Gorbachev's policy of glasnost gave news- 
paper and magazine editors in Latvia and other republics of 
the Soviet Union unprecedented opportunities to publish 
information on a wide range of formerly proscribed subjects, 
including crime, illegal drugs, occupational injuries, and envi- 
ronmental issues. Thus, an article published in October 1986 
in the Latvian literary journal Literatura un Maksla, discussing 
the environmental impact of a new hydroelectric station that 
was to be built on the Daugava River, helped to arouse so much 
public opposition that a decision was made by the Soviet gov- 
ernment in 1987 to abandon the project (see Natural Re- 
sources, this ch.). Subsequently, after the pivotal June 1988 
plenum of the Latvian Writers Union, the speeches delivered at 
this plenum, denouncing the Soviet Latvian status quo and 
demanding greater autonomy for the Latvian republic, re- 
ceived nationwide attention when they were published in four 
successive issues of Literatura un Maksla (see The Pursuit of 
Independence, 1987-91, this ch.). 

In the early 1990s, as the transition to a market-oriented 
economy began and competition intensified, both the circula- 
tion and the content of newspapers and magazines changed. 
Rising production costs caused subscription rates and news- 
stand prices to increase, and sales declined steadily. Neverthe- 
less, in 1995 Latvia had a daily newspaper circulation rate of 
1,377 per 1,000 population, compared with 524 per 1,000 pop- 
ulation in Finland, 402 per 1,000 population in Germany, and 
250 per 1,000 population in the United States. More than 200 
newspapers and 180 magazines were in circulation. 

Foreign Relations 

Establishing Foreign Relations 

Prior to the declaration of renewal of Latvia's independence 
on May 4, 1990, several individuals were responsible for foreign 
affairs. Their presence in this field was wholly symbolic, how- 
ever, because all decisions on foreign policy were made by gov- 



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Estonia, Latvia, and Lithuania: Country Studies 

ernment administrators and party officials in Moscow. After the 
May 4 declaration, a new Ministry of Foreign Affairs was estab- 
lished, headed by Janis Jurkans, chairman of the Foreign 
Affairs Committee of the Popular Front of Latvia. Initially, the 
entire ministry, composed of a few dozen workers, was 
squeezed into a single house in the medieval center of Riga 
and had antiquated amenities and limited space. 

The ministry had to start from the very beginning. Some of 
its personnel were sent abroad to learn the essentials of diplo- 
matic protocol. Even the most prosaic of office equipment had 
to be scavenged. Initially, Jurkans was forced to deal with some 
holdover personnel with links to the KGB, but several of them 
were eased out of their jobs for incompetence and other overt 
transgressions. On June 19, 1990, the KGB created a furor in 
the republic when it arrested and expelled from Latvia (pre- 
sumably with Moscow's blessing) a young Latvian-American vol- 
unteer who had provided English-language translations and 
other services for the ministry in dealing with foreign coun- 
tries. 

During this period of transition, Latvia received much help 
from the Latvian embassy in Washington. This embassy had 
been maintained as an independent outpost representing free 
Latvia throughout the years of Soviet occupation. It had been 
financed from the investments and gold deposited in the 
United States by the government of independent Latvia before 
World War II. Similar offices throughout the world offered 
advice and contacts with local governments. Indeed, the 
embassy in Washington was able to provide Minister Jurkans 
with about US$60,000 to further the cause of Lama's indepen- 
dence, which was then the main thrust of Latvian foreign pol- 
icy. 

Until August 21, 1991, and the end of the Moscow putsch, 
Latvia was not able to convince any Western country to locate 
an embassy in the republic. The countries feared offending the 
Soviet Union and could not answer the logistical question of 
how to settle in Riga when all border guards at the airports and 
seaports were still under Soviet command. Most Western coun- 
tries had not abrogated the de jure status of independent 
Latvia; the issue concerned purely de facto recognition. Several 
countries, such as Denmark, opened cultural offices in Riga, 
and, more important, many countries invited Minister Jurkans 
and Prime Minister Ivars Godmanis abroad to meet their heads 
of state and government and to present their arguments for 



154 



Latvia 



Latvia's independence. Several meetings with President George 
H.W. Bush and other world dignitaries received wide media 
coverage. 

An invaluable diplomat during this period of transition was 
the highly respected Latvian poet Janis Peters, who had been 
sent to Moscow to represent Latvia's interests. Peters also had 
many contacts and was highly regarded by the Russian intelli- 
gentsia. He was based in the prewar Latvian embassy, which 
had already been returned to Latvia several years earlier. A 
modern hotel, the Talava, had been built within its compound 
by Latvian communist dignitaries seeking trouble-free accom- 
modations on their various sojourns in Moscow. The embassy 
building and the hotel became convenient locations for a mul- 
titude of contacts by economic, cultural, and political emissar- 
ies from Latvia. 

Before August 21, 1991, Latvia's attempts to join interna- 
tional organizations were unsuccessful in spite of efforts by 
France and other countries to allow it to participate as an 
observer. Only at the regional level was some success achieved 
with the signing by Latvia, Estonia, and Lithuania of the Baltic 
Agreement on Economic Cooperation in April 1990 and the 
renewal in May 1990 of the 1934 Baltic Treaty on Unity and 
Cooperation. At the bilateral level, Latvia and Russia under 
Boris N. Yeltsin signed a treaty of mutual recognition in Janu- 
ary 1991, but this treaty was not ratified by the Russian 
Supreme Soviet. 

After the failed Moscow putsch, Latvian independence was 
recognized by the Soviet Union and most countries of the 
world, and Latvia became a member of the UN. These events 
were exhilarating for Latvians, who had been under Moscow's 
domination for almost half a century. However, new responsi- 
bilities of representation entailed a totally new set of problems. 
Setting up new embassies and consulates in major Western 
countries required the choosing of suitable personnel from 
among people without previous diplomatic experience. A con- 
siderable number of ambassadors were selected from diaspora 
Latvians in the United States, Britain, Denmark, France, and 
Germany. 

Financing was another major constraint. Initiatives were 
taken to reclaim the embassy buildings that had once belonged 
to independent Latvia but had been appropriated by the Soviet 
Union or by host governments. In some instances, cash settle- 
ments and building exchanges became the only solution. 



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Estonia, Latvia, and Lithuania: Country Studies 

Problems were also experienced in the opposite direction. 
Foreign countries wanting to establish embassies in Riga often 
had to scramble for suitable sites at a time when ownership and 
jurisdictional questions over property presented an intermina- 
ble maze of inconsistent decrees and agreements. At times the 
Latvian cabinet had to step in to provide locations. Some of the 
major Western countries were able to settle into their prewar 
buildings. Others found new quarters or set up their offices in 
temporary shelters in hotels and other buildings. A great con- 
troversy erupted over the restitution of the prewar Russian 
embassy building, which for decades had been used for Latvian 
cultural and educational purposes. 

Minister Jurkans spent much time traveling abroad. His dis- 
tinctly liberal ideology ingratiated him with his Western hosts. 
In the process of representing Latvia, however, many Latvians 
began to feel that he was becoming too independent and did 
not reflect Latvia's real demands. After Jurkans' s resignation in 
the spring of 1993, his replacement as interim minister was 
Georgs Andrejevs, a surgeon of Russian descent. Andrejevs 
joined the Latvia's Way movement and was reappointed minis- 
ter of foreign affairs after the June 1993 elections. According to 
polling data, Andrejevs became one of the most popular politi- 
cians among ethnic Latvians, but ironically he did not find 
much resonance among non-Latvians living in the republic. 

In June 1993, the Latvian Ministry of Foreign Affairs 
employed 160 people, a relatively low number, reflecting the 
limitations of government financing. Prewar Latvia had had 
700 employees in the same ministry, and countries comparable 
in size to Latvia employ about 1,000 people on average. 

Foreign Policy Directions 

Latvian foreign policy has of necessity been preoccupied 
with its eastern neighbor, Russia. The lack of stability and the 
seemingly contradictory signals coming from Russia created 
strains in this relationship. A primary point of contention in 
the early 1990s concerned the evacuation of the armed forces, 
which were formerly Soviet but now Russian. Another major 
issue involved citizenship limitations on Russian-speaking set- 
tlers whose ties with Latvia began only after June 1940 and the 
occupation by the Red Army. 

In late August 1993, the Russian armed forces were with- 
drawn from neighboring Lithuania, which has a relatively small 
native Russian population. In Latvia the timetable for the 



156 



Latvia 



departure of the remaining 16,000 to 18,000 troops took 
longer to negotiate. Russia tried to connect the withdrawal to 
the issue of citizenship rights for Latvia's large Russian minor- 
ity, but it failed to receive international support for such link- 
age. Another issue was the status of a radar base at Skrunda, 
which Russia considers an integral part of its antimissile early 
warning system. 

Nervous about Russia's intentions, the Latvians could not 
forget that in 1940 a pretext for the takeover and annexation of 
Latvia was to protect Soviet bases established there in 1939. On 
January 18, 1994, Russian foreign minister An drey Kozyrev 
explicitly claimed Russia's right to maintain troops in the Baltic 
states to avoid a security vacuum and to preempt the establish- 
ment of forces hostile to Russia. Similar statements had been 
enunciated earlier by the Russian defense minister and other 
officials. 

Russia's continued military presence became a major bar- 
gaining chip for Russian internal politics and foreign policy. 
Along with Russia's claims about the strategic importance of 
the radar base at Skrunda, the Russian government said there 
was no room in which to lodge incoming officers from Latvia. 
Some Russian generals and governmental officials broached 
the possibility of tying their troop withdrawals to North Atlantic 
Treaty Organization (NATO) troop reductions. Others asked 
for large grants to build living quarters back in Russia. Yeltsin 
declared that the troop withdrawals were tied to the human 
rights question in Latvia, especially as it pertained to residents 
of Russian origin. Many Latvians attributed the delay to the 
hope of some Russian military and political leaders that politi- 
cal changes might occur in Moscow and the status quo ante 
reestablished. 

Under such circumstances, the Latvian leadership con- 
cluded that the best hope for security would be membership in 
NATO rather than neutrality. NATO, however, demonstrated a 
willingness to assist Latvia and the other Baltic states only in an 
advisory capacity. Much to their disappointment, Latvian lead- 
ers determined that joining NATO was an elusive goal. 

Ultimately, in exchange for the withdrawal of the Russian 
troops, Latvia consented to lease the Skrunda facility to Russia 
for five years. The accord, signed in Moscow in April 1994, stip- 
ulates that the radar base must cease operation by August 31, 
1998, and be dismantled by February 29, 2000. Agreements 
were also signed on social security and welfare for active and 



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Estonia, Latvia, and Lithuania: Country Studies 

retired Russian military personnel and their families in Latvia. 
With the exception of several hundred military specialists at 
Skrunda, all active-duty Russian troops were withdrawn from 
Latvia by August 31, 1994, leaving behind a hodge-podge of 
toxic chemicals and buried, undetonated ordnance. 

Latvia and Estonia received much help from Scandinavia, 
the United States, and other Western countries in pressuring 
Russia to remove its troops. To counter the argument that 
these troops would have no accommodations in Russia, several 
countries, including Norway and the United States, provided 
funding to construct new housing for Russian officers. 

Other issues between Latvia and Russia included Russia's 
annexation of the northeastern border district of Abrene in 
1944. Latvia's transitional parliament, the Supreme Council, 
reaffirmed the validity of the pre-Soviet borders in its Decree 
on the Nonrecognition of the Annexation of the Town of 
Abrene and the District of Abrene, adopted in January 1992. 
Although the withdrawal of Russian troops figured much more 
prominently than the border issue in Latvian-Russian negotia- 
tions in the early 1990s, it could resurface in the context of 
wider negotiations of claims and reparations. 

The ongoing pressures from Russia have given impetus for 
Latvia to strengthen its ties with international institutions. As a 
member of the UN, Latvia was able to refute Russian charges 
on the abuse of human rights in Latvia. Latvia also has joined 
many of the subsidiary bodies of the UN, such as the World 
Health Organization (WHO) and the United Nations Educa- 
tional, Scientific and Cultural Organization (UNESCO). Latvia 
has also joined NATO's Partnership for Peace, a program of 
cooperation with the newly independent states. 

Although Estonia and Lithuania were accepted as members 
of the Council of Europe (see Glossary) in early 1993, in spite 
of strong Russian objections, Latvia had only the status of an 
observer. Full membership for Latvia, precluded earlier by the 
unresolved issue of citizenship rights, was granted in early 
1995. 

In the early 1990s, the Council of the Baltic Sea States 
(CBSS) became a particularly useful forum for foreign policy 
contacts. This council was proposed on October 22, 1991, dur- 
ing a meeting of the German and Danish foreign ministers, 
Hans-Dietrich Genscher and Elleman Jensen, respectively. Its 
first directions were set by the ten countries bordering the Bal- 
tic Sea, including Russia, when representatives met on March 



158 



Latvia 



5-6, 1992. Concrete proposals for Latvia have included the 
coordination of an international highway project, Via Baltica, 
from Tallinn to Warsaw. 

The Scandinavian countries and Germany are among 
Latvia's most active international supporters. Mutually friendly 
bilateral relations are maintained with members of the Viseg- 
rad Group (consisting of Poland, the Czech Republic, Slovakia, 
and Hungary). Latvia also has been able to develop advanta- 
geous relations with Belarus and Ukraine. A generally good 
and cooperative relationship exists with neighboring Estonia 
and Lithuania. At the economic level, these states have signed 
free-trade agreements. They are also cooperating at the mili- 
tary level. Military cooperation among the Baltic states 
included an agreement in October 1994 to form, with Western 
assistance, a Baltic peacekeeping battalion, headquartered in 
Latvia. 

Together with the other Baltic countries, Latvia has many 
more adjustments to make in its evolution from "cause to coun- 
try," as noted by Paul Goble in Tallinn's Baltic Independent, May 
21-27, 1993: "The peoples and governments of the Baltics must 
cope with the difficult challenge of being taken seriously as 
countries . . . The Baits must find their way in the world as 
three relatively small countries on the edge of Europe — and for 
many people, on the edge of consciousness — rather than fig- 
ure as central players in a titanic struggle between East and 
West." 

National Security 
Defense 

One of the important debates after independence stemmed 
from the issue of whether Latvia requires its own armed forces. 
According to one argument against a national armed forces, 
the most likely aggressor is Russia, and if this state wants to vio- 
late Latvia's sovereignty by force, even the best equipped and 
most dedicated Latvian army could slow down such an assault 
only for a brief period of time. Those supporting a national 
armed forces pointed to their possible contribution in estab- 
lishing law and order within the republic, in coping with emer- 
gencies, in controlling borders, and in providing a symbol of 
statehood and a source of pride. Those with a knowledge of 
Latvian history explained that in June 1940 when the Soviet 
Union presented Latvia with an ultimatum, the lack of any mil- 



159 



Estonia, Latvia, and Lithuania: Country Studies 

itary resistance helped to dupe many in the world into accept- 
ing the myth of Latvia's voluntarily joining the Soviet Union. 
Any new ultimatum from Russia would very likely include a 
serious consideration of armed resistance by the Latvian forces, 
even if only to prove a point to the rest of the world. Former 
Minister of Defense Talavs Jundzis provided exactly such a 
rationale: "Sometimes I am asked: 'How can you with your 
9,000-man defense forces stand up against a 300,000 or up to 3 
million-man aggressor force?' The answer is simple. Our resis- 
tance by itself will generate an international reaction. It will be 
clear to everyone as to what is happening and even if we are 
again occupied, international public opinion will not accept 
such a regime and it would not last long." Jundzis provided 
another reason for Latvia's armed forces, which is based on 
Latvian historical experience: "Aggressive announcements 
from the Organization of Russian Army Officers about their 
disobedience to their commanders and their readiness to use 
weapons to defend themselves remind us of our struggle for 
independence in 1919, when after the end of World War I, the 
abandoned soldiers from Russian and German armies united 
under the leadership of the adventurer Bermont to attack and 
occupy the newly born state of Latvia." 

Latvia was able to create a Ministry of Defense only after Sep- 
tember 1991, when Latvia was formally recognized as an inde- 
pendent state by the Soviet Union. Before independence, the 
Soviet armed forces were in charge of defense and with increas- 
ing difficulty attempted to force the young men of Latvia to 
register for the draft. In November 1991, after the creation of 
the new Latvian ministry, Jundzis, a Popular Front of Latvia 
deputy and chairman of the Latvian Supreme Council's Com- 
mittee on Defense and Internal Affairs, became the first minis- 
ter of defense in Latvia since June 1940. 

The Latvian Ministry of Defense, unlike that of Ukraine and 
other former Soviet republics, did not receive or appropriate 
any of the armaments existing on its territory. All armaments 
were for sale, but only at world market prices. The Latvian 
armed forces, however, were successful in obtaining their head- 
quarters and several other abandoned buildings. 

Latvia's defense concept is based on the Swedish-Finnish 
rapid response force model. In 1994 the armed forces totaled 
6,600, including 1,650 in the army, 630 in the navy, 180 in the 
air force, and 4,140 in the border guard. Plans call for 9,000 
active members in the armed forces. Latvia also has the security 



160 



Barricade erected in Riga's old town in January 1991 to defend 
strategic buildings from attack by Soviet troops 
Courtesy Linda Sudmalis 



service of the Ministry of Interior and the reserve Home Guard 
(Zemessardze). In addition to serving as a national guard, the 
Home Guard, with an estimated 17,000 members, assists the 
border guard and the police. When they reach the age of nine- 
teen, men serve a mandatory one-year period of active military 
duty, but men and women at least eighteen years of age may 
volunteer for military service. Alternative service for conscien- 
tious objectors is available. 

The armed forces are poorly equipped. In the early 1990s, 
donations of jeeps and field kitchens came from Germany, 
patrol boats from Germany and Sweden, and uniforms from 
Norway. The army's equipment includes two BRDM-2 recon- 
naissance vehicles and thirteen M-43 armored personnel carri- 



161 



Estonia, Latvia, and Lithuania: Country Studies 

ers. The navy has about six coast guard vessels, three patrol 
craft, two minesweepers, one special-purpose vessel, and one 
tugboat. The air force's equipment includes two Soviet An-2 
and two Czechoslovak L-410 aircraft and several Soviet Mi-2 
and Mi-8 helicopters. 

Many officers are ethnic Latvians from the former Soviet 
armed forces, who, according to critics, are set in their ways 
and are difficult to retrain. Such reformers as former Minister 
of Defense Valdis Pavlovskis, a retired United States Marine 
Corps officer and instructor, attempted to remedy this situa- 
tion through the establishment of local military institutes, 
including the Latvian Military Academy, and through enroll- 
ment in programs at Western military institutes. Ongoing cor- 
respondence and part-time training programs also were intro- 
duced. 

The Ministry of Defense provides extremely low remunera- 
tion because it is short of funds. The 1993 state budget allotted 
only 2.9 percent of its expenditures for national security, which 
includes the Ministry of Defense, the security service of the 
Ministy of Interior, and the Home Guard. This sum is claimed 
to be only one-tenth of what would be required for normal 
functioning of the forces. In the second half of 1992, only 40.5 
million Latvian rubles were allotted for food, 42 million rubles 
for clothing, and 79.8 million rubles for equipment purchases, 
but 59.3 million rubles were allotted for capital construction. 
In 1993 about US$48 million was allocated to defense. 

Crime and Law Enforcement 

Crime was a serious problem in Latvia in the early 1990s, as it 
was in the other Baltic states and elsewhere in the former 
Soviet Union. The total number of reported crimes increased 
from 34,686 in 1990 to 61,871 in 1992 and then dropped to 
52,835 in 1993. The number of convictions rose from 7,159 in 
1990 to 11,280 in 1993. Theft accounted for more than three- 
quarters of all crimes, although the number of reported cases 
declined from 51,639 in 1992 to 41,211 in 1993. The incidence 
of murder or attempted murder was 2.6 times higher in 1993 
than in 1990. Drug-related offenses more than tripled in this 
period. Drugs as well as alcohol, weapons, scrap metals, and 
consumer products were often smuggled into the country. 

Subjected to the spread of organized crime from Russia, 
Latvia cooperated with neighboring Estonia and Lithuania and 
other countries via the International Criminal Police Organiza- 

162 




Liberty Monument in Riga 
Courtesy Chester Pavlovski 



163 



Estonia, Latvia, and Lithuania: Country Studies 

tion (Interpol). The Latvian authorities were gradually replac- 
ing the Soviet-trained police, although allegations of corrup- 
tion in the law enforcement community persisted. Political cor- 
ruption and white-collar crime also posed significant problems. 
The lack of funding for remuneration, equipment, and even 
gasoline for police vehicles hampered law enforcement opera- 
tions. The Home Guard assisted in police patrols but had no 
power to make arrests. 

Latvia's penal code includes the death penalty. One person, 
sentenced to death in July 1992 for premeditated murder 
under aggravated circumstances, was executed in 1993. Two 
death sentences were commuted, leaving no prisoners on 
death row at the end of 1993. There were no known instances 
of political or other extrajudicial killings, of political abduc- 
tions, of torture, of arbitrary arrest or exile, or of denial of a 
fair public trial. The government welcomed visits by human 
rights organizations and received delegations from the Organi- 
zation for Security and Cooperation in Europe, the Council of 
Europe, and the UN, among others. 

Outlook 

Latvia was the first Baltic republic to begin the process of 
public empowerment and disentanglement from the legacy of 
a half-century of Soviet rule, initiating the 1987 "calendar" 
demonstrations, which commemorated long-suppressed criti- 
cal turning points in Latvian history. Thereafter, Estonia and 
then Lithuania picked up the torch in a unique historical relay 
race whose end point was independence. 

With independence, however, Latvia had to adjust to totally 
new circumstances. New rules of the game had to be intro- 
duced and accepted. Democratic structures and practices had 
to be formed or revived. The initial rigors of a market economy 
and of privatization had to be endured. A new orientation to 
the rule of law and to the public clash of many voices had to be 
sanctioned and supported. 

Much progress has been made in all these areas; much still 
remains to be done. The pressure of nationality relations, citi- 
zenship issues, economic strategies and priorities, and political 
confrontations between radical and moderate factions will no 
doubt remain for some time. These internal problems, how- 
ever, do not surpass the coping capacity of Latvian political and 
social structures. The major threat lies in the potential actions 



164 



Latvia 



of neighboring Russia, where forces of imperial irredentism 
are finding many political allies. 

Ideally, Latvia's future would be best assured by a stable and 
peaceful Russia. This is a goal supported by most Latvian politi- 
cians. If such a goal becomes unattainable, however, Latvia 
would be compelled to rely on external protection provided by 
its Western neighbors. It remains to be seen if Latvia will be 
granted the same protective status as that enjoyed by Denmark, 
Belgium, the Netherlands, and other European countries 
under the NATO umbrella. 

* * * 

Among the best works on Latvian history are Arnolds 
Spekke's History of Latvia: An Outline and Alfreds Bilmanis's A 
History of Latvia. The interwar period is described well in Georg 
Von Rauch's The Baltic States: The Years of Independence, 1917- 
1940 and the Soviet period in Romuald J. Misiunas and Rein 
Taagepera's The Baltic States: Years of Dependence, 1940-1990. 
The period of national awakening is analyzed and described by 
Juris Dreifelds in "Latvian National Rebirth," Problems of Commu- 
nism, July-August 1989, and by Anatol Lieven in The Baltic Revo- 
lution. An unsurpassed classic on Latvian geography is Latvia: 
Country and People by J . Rutkis. The National Report of Latvia to 
UNCED, 1992, prepared for the Rio de Janeiro World Confer- 
ence by the Environmental Protection Committee of Latvia, is 
a very good summary of post-Soviet Latvia and its environmen- 
tal problems. A good source of statistical data is Latvija Skaitlos 
(Latvia in Figures), the annual report of Latvia's State Commit- 
tee for Statistics (Valsts Statistikas Komiteja). Invaluable and 
current information on Latvia's economy is provided by the 
monthly Baltic Business Report. Very good analytical articles on 
various aspects of government and politics in Latvia can be 
found in the RFE/RL Research Report. A most useful compen- 
dium of articles on foreign policy has been published in New 
Actors on the International Arena: The Foreign Policies of the Baltic 
Countries, edited by Pertti Joenniemi and Peeter Vares, and on 
national security in Comprehensive Security for the Baltics: An Envi- 
ronmental Approach, edited by Arthur H. Westing. (For further 
information and complete citations, see Bibliography.) 



165 



Chapter 3. Lithuania 



Wayside wooden sculpture near Druskininkai 



Country Profile 



Country 

Formal Name: Republic of Lithuania (Lietuvos Respublika). 
Short Form: Lithuania (Lietuva). 
Term for Citizen(s): Lithuanian (s). 
Capital: Vilnius. 

Date of Independence: On March 11, 1990, newly elected 
Lithuanian Supreme Soviet proclaimed independence; Soviet 
Union granted recognition September 6, 1991. February 16, 
Independence Day, national holiday; on this day in 1918, 
independent Republic of Lithuania proclaimed. 

Geography 

Size: 65,200 square kilometers, approximately size of West 
Virginia. 

Topography: Alternating lowlands and highlands; many lakes, 
particularly in east, and rivers. Fertile soil. Forest and wood- 
lands 28 percent; mainly pine, spruce, and birch. Arable land 
49 percent; meadows and pastureland 22 percent. Highest ele- 
vation 297 meters. 

Climate: Maritime position moderates otherwise continental 
climate. Average January temperature 1.6°C on coast and 2.1°C 
in Vilnius; average July temperature 17.8°C on coast and 18.1°C 
in Vilnius. Average annual precipitation 71 7 millimeters on 
coast and 490 millimeters in east. 

Society 

Population: 3,717,000 (1995 estimate). Population declined in 
early 1990s because of low natural growth rates and net out- 
migration. In 1994 birth rate 12.0 per 1,000 population; death 



169 



Estonia, Latvia, and Lithuania: Country Studies 

rate 12.8 per 1,000 population. Total fertility rate 2.1 children 
per woman in 1991. Population density 57.0 persons per square 
kilometer. Life expectancy 69.1 years in 1993 (63.3 years for 
males and 75.0 years for females). 

Ethnic Groups: According to 1994 official estimate, Lithua- 
nians 81.1 percent, Russians 8.5 percent, Poles 7.0 percent, 
Belarusians 1.5 percent, Ukrainians 1.0 percent, and others 
(including Latvians, Tatars, Gypsies, Germans, Estonians, and 
Jews) 0.9 percent. 

Languages: Official language Lithuanian; Russian, Polish, Bela- 
rusian, Ukrainian, and other languages also used. 

Religion: Predominantly Roman Catholic. Other denomina- 
tions include Evangelical Reformed, Evangelical Lutheran, 
Russian Orthodox, Uniate, and Jewish. 

Education: According to 1992 constitution, education com- 
pulsory from age six to sixteen and free at all levels. In 1993-94 
some 510,500 students in 2,317 primary and secondary 
schools, 45,200 students in 108 secondary specialized institu- 
tions, and 53,000 students in fifteen higher education institu- 
tions (including universities). Optional religious instruction 
introduced in schools in 1991. Literacy rate 99 percent in 1994. 

Health and Welfare: Sufficient facilities to guarantee free 
medical care. In 1990 forty-six physicians and dentists, 12V 
paramedical personnel, and 124 hospital beds per 10,000 
inhabitants. Private health care practice legalized in late 1980s, 
but health care system remains mostly state owned and state 
run. Medical care does not meet Western standards; hindered 
by shortages of medical equipment, supplies, and drugs. 
National social security system provides cradle-to-grave social 
insurance and social benefits. 

Labor Force: 1.9 million (1994 estimate); industry 32 percent; 
construction 12 percent; agriculture 18 percent; science, 
education, and culture 14 percent; health care 7 percent; 
transportation and communications 7 percent; and trade and 
government 10 percent. 



170 



Lithuania 



Economy 

Gross National Product (GNP): Estimated at US$4.9 billion in 
1993: per capita income US$1,310. Gross domestic product 
(GDP) estimated at 20 billion litai in 1994; real GDP fell by 
13.4 percent in 1991, by 35.0 percent in 1992, and by 16.5 
percent in 1993, but grew by 2.0 percent in 1994. Inflation rate 
in 1994 estimated at 45 percent. 

Agriculture: 24.0 percent of GDP in 1992. Significant reforms 
introduced in 1990s: 83 percent of agricultural privatization 
program completed by mid-1993. Large farms broken up into 
small holdings, often too small to be economically viable. 
Agricultural output fell by 50 percent from 1989 to 1994. 
Principal crops wheat, feed grains, flax, rye, barley, sugar beets, 
legumes, potatoes, and vegetables. 

Industry: 33.9 percent of GDP in 1992. Industry provided 33 
percent of employment in 1994. Industrial production de- 
clined by more than 50 percent in 1993. 

Energy: Receives most of its electricity from Ignalina nuclear 
power plant, but highly dependent on fuels imported from 
Russia. 

Exports: USS1 billion (1994 estimate). Major commodities 
machinery, electronics, textiles, light industrial products, and 
food products. 

Imports: US$1.3 billion (1994 estimate). Major commodities 
natural gas, oil, coal, machinery, chemicals, and light industrial 
products. 

Major Trading Partners: Russia, Germany, Ukraine, Belarus, 
Latvia, Poland, France, Italy, and United States. 

Currency and Exchange Rate: Litas (pi., litai) introduced June 
1993 and became sole legal tender August 1993. 1 litas = 100 
centas. In October 1992, Russian ruble replaced by provisional 
coupon currency, the talonas (pi., talonai), pegged at parity 
with ruble: talonas had been circulating parallel with ruble 
since May 1992. In March 1996, 4.0 litai = US$1. 



171 



Estonia, Latvia, and Lithuania: Country Studies 

Fiscal year: Calendar year. 

Transportation and Telecommunications 

Roads: In 1994 about 55,603 kilometers total, of which 42,209 
kilometers asphalted. 

Railroads: In 1994 about 2,000 kilometers of railroads (1,524- 
millimeter gauge), of which 122 kilometers electrified. Train 
service available to Daugavpils in Latvia and to Poland and 
Belarus. 

Civil Aviation: International airports at Vilnius and Siauliai. 
State-owned Lithuanian Airlines operates flights to Amster- 
dam, London, Paris, Copenhagen, Berlin, Frankfurt, and forty- 
three cities in former Soviet Union. Service also provided by 
Aeroflot, Austrian Airlines, Drakk Air Lines, Hamburg Airlines, 
LOT (Polish Airlines), Lufthansa, Malev, SAS (Scandinavian 
Airlines), and Swissair. 

Shipping: 600 kilometers of inland waterways navigable year 
round. Inland port Kaunas; maritime port Klaipeda. During 
Soviet period, 90 percent of Klaipeda's traffic went to other 
Soviet republics. 

Telecommunications: 900,000 telephone subscriber circuits, or 
240 per 1,000 persons, among most advanced of former Soviet 
republics. In 1993 an estimated 1.4 million television sets and 
more than 1.4 million radios in use, or one per 2.7 persons. 

Government and Politics 

Government: Independent democratic republic. President, 
elected for term of five years and a maximum of two 
consecutive terms, is head of state. Seimas, a unicameral 
legislative body, holds supreme legislative authority. Its 141 
members are elected for four-year terms. It initiates and 
approves legislation sponsored by prime minister. Cabinet, 
known as Council of Ministers, is headed by prime minister, 
who is appointed by president with approval of Seimas. 

Judicial System: Based on civil law system, with no judicial 



172 



Lithuania 



review of legislative acts. Independent of authority of legislative 
and executive branches of government, but subject to their 
influence. Judicial power held by Supreme Court; Seimas 
appoints and dismisses its judges on recommendation of head 
of state. Other courts include Constitutional Court, Court of 
Appeals, and district, local, and special courts. 

Politics: Two main political organizations: Lithuanian 
Democratic Labor Party (LDLP; successor to Communist Party 
of Lithuania), which won more than half of seats in Seimas 
elected October 1992; and Fatherland Union, main opposition 
grouping and successor to Sajudis independence movement. 
Numerous overlapping factions, coalitions, and smaller parties. 

Administrative Divisions: Forty-four regions (rajonai; sing. 
rajonas — rural districts) and eleven municipalities, divided into 
twenty-two urban districts and ninety-two towns. 

Foreign Relations: Member of United Nations and its 
specialized agencies, World Bank, and International Monetary 
Fund, and a number of European economic and security 
organizations. Since independence, cornerstone of Lithuanian 
foreign policy has been integration with European security 
institutions: Organization for Security and Cooperation in 
Europe (OSCE), Council of Europe (COE), European Union 
(EU), North Atlantic Cooperation Council (NACC), World 
Trade Organization (WTO), and, ultimately, North Atlantic 
Treaty Organization (NATO). Member of OSCE, COE, and 
NACC, and associate member of EU. Concluded Baltic 
Agreement on Economic Cooperation April 12, 1990, with 
Latvia and Estonia. Member of Council of the Baltic Sea States. 
Agreements on economic cooperation signed with Russia in 
November 1993; with Ukraine, February 1994; and with 
Poland, April 1994. On July 18, 1994, free-trade agreement 
signed with European Union effective January 1, 1995, to 
eliminate tariff barriers during six-year transition period. 

National Security 

Armed Forces: In 1994 armed forces totaled 8,900, including 
army (4,300), navy (350), air force (250), and border guard 



173 



Estonia, Latvia, and Lithuania: Country Studies 



(4,000). Mandatory draft period of one year in active-duty 
status; alternative service for conscientious objectors available. 
Also, 12,000-member Home Guard force. In February 1993, 
some 14,000 Russian troops remained in Lithuania; last 
Russian troops withdrawn August 1993. 

Military Budget: About 1 percent of government expenditures 
allocated for defense in 1993. 



174 



International boundary 

® National capital 
• Populated place 

25 50 Kilome ters 
6 25 50 Miles 



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Boundary representation 
not necessarily authoritative 



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POLAND 



Figure 11. Lithuania, 1995 



176 



LYING BETWEEN EAST AND WEST, through six centuries 
Lithuania has endured and been devastated by the clash of 
interests between the Swedes, the French, and the Germans on 
the one side and the Russians on the other. Many generations 
of Lithuanians have had to rebuild after the destruction 
brought upon them as a result of East-West conflicts or domes- 
tic insurrections against Russia. Lithuanians also have been 
forced to take sides, although they have tried to assert their 
own will, especially in modern times. 

Lithuania became independent in 1918, but in 1940 it was 
occupied and annexed by the Soviet Union. Soviet hegemony, 
which wreaked further devastation, lasted until 1991, when 
Lithuania once again achieved recognition as an independent 
state. The circumstances of the Soviet takeover and the refusal 
of the United States and other nations to recognize de jure 
Lithuania's forcible incorporation into the Soviet Union have 
distinguished Lithuania, as well as the neighboring states of 
Estonia and Latvia, from the other former Soviet republics in 
international law and politics throughout the postwar era. 

Historical Setting 
Early History 

Lithuanians belong to the Baltic group of nations. Their 
ancestors moved to the Baltic region about 3000 B.C. from 
beyond the Volga region of central Russia. In Roman times, 
they traded amber with Rome and around A.D. 900-1000 split 
into different language groups, namely, Lithuanians, Prussians, 
Latvians, Semigallians, and others. The Prussians were con- 
quered by the Teutonic Knights, and, ironically, the name 
"Prussia" was taken over by the conquerors, who destroyed or 
assimilated Prussia's original inhabitants. Other groups also 
died out or were assimilated by their neighbors. Only the 
Lithuanians and the Latvians survived the ravages of history. 

Traditions of Lithuanian statehood date from the early Mid- 
dle Ages. As a nation, Lithuania emerged about 1230 under the 
leadership of Duke Mindaugas. He united Lithuanian tribes to 
defend themselves against attacks by the Teutonic Knights, who 
had conquered the kindred tribes of Prussia and also parts of 
present-day Latvia. In 1251 Mindaugas accepted Latin Chris- 



177 



Estonia, Latvia, and Lithuania: Country Studies 

tianity, and in 1253 he became king. But his nobles disagreed 
with his policy of coexistence with the Teutonic Knights and 
with his search for access to western Europe. Mindaugas was 
killed, the monarchy was discontinued, and the country 
reverted to paganism. His successors looked for expansion 
toward the Slavic East. At that early stage of development, 
Lithuania had to face the historically recurring question dic- 
tated by its geopolitical position — whether to join western or 
eastern Europe. 

At the end of the fourteenth century, Lithuania was already 
a large empire extending from the Baltic Sea to the shores of 
the Black Sea. Grand Duke Jogaila (r. 1377-81 and 1382-92) of 
the Gediminas Dynasty faced a problem similar to that faced by 
Mindaugas 150 years earlier: whether to look to the East or the 
West for political and cultural influences. Under pressure from 
the Teutonic Knights, Lithuania, a kingdom of Lithuanians 
and Slavs, pagans and Orthodox Christians, could no longer 
stand alone. Jogaila chose to open links to western Europe and 
to defeat the Teutonic Knights, who claimed that their mission 
was not to conquer the Lithuanians but to Christianize them. 
He was offered the crown of Poland, which he accepted in 

1386. In return for the crown, Jogaila promised to Christianize 
Lithuania. He and his cousin Vytautas, who became Lithuania's 
grand duke, converted Lithuania to Christianity beginning in 

1387. Lithuania was the last pagan country in Europe to 
become Christian. The cousins then defeated the Teutonic 
Knights in the Battle of Tannenberg in 1410, stopping Ger- 
manic expansion to the east. 

Attempts by Vytautas to separate Lithuania from Poland 
(and to secure his own crown) failed because of the strength of 
the Polish nobility. Lithuania continued in a political union 
with Poland. In 1569 Lithuania and Poland united into a single 
state, the Polish-Lithuanian Commonwealth, whose capital was 
Krakow, and for the next 226 years Lithuania shared the fate of 
Poland. During this period, Lithuania's political elite was domi- 
nated by the Polish nobility and church, resulting in neglect of 
the Lithuanian language and introduction of Polish social and 
political institutions. It also opened the doors to Western mod- 
els in education and culture. 

In 1795 an alliance between the Germanic states — Prussia 
and Austria — and the Russian Empire ended Poland's indepen- 
dent existence. Lithuania became a Russian province. Two 
insurrections, initiated by the Poles in 1831 and again in 1863, 



178 



Lithuania 



failed to liberate the country. The Russian Empire eliminated 
Polish influence on Lithuanians and introduced Russian social 
and political institutions. Under tsarist rule, Lithuanian 
schools were forbidden, Lithuanian publications in the Latin 
script were outlawed, and the Roman Catholic Church was 
severely suppressed. However, the restrictive policies failed to 
extinguish indigenous cultural institutions and language. 

A national awakening in the 1880s, led by the secular and 
clerical intelligentsia, produced demands for self-government. 
In 1905 Lithuania was the first of the Russian provinces to 
demand autonomy. Independence was not granted because 
the tsar firmly reestablished his rule after the Revolution of 
1905. But the demand, articulated by the elected Grand Diet of 
Vilnius, was not abandoned. World War I led to the collapse of 
the two empires — the Russian and the German — making it pos- 
sible for Lithuania to assert its statehood. Germany's attempt to 
persuade Lithuania to become a German protectorate was 
unsuccessful. On February 16, 1918, Lithuania declared its full 
independence, and the country still celebrates that day as its 
Independence Day. 

Independence, 1918-40 

During 1918-20 Lithuania successfully fought a war with 
newly independent Poland to defend its independence. At the 
end of 1920, however, Poland annexed Lithuania's capital city 
and province of Vilnius, which it held until World War II. 
Lithuania refused to have diplomatic relations with Poland 
until 1938 on the grounds that Poland illegally held the Vilnius 
region. After declaring independence, Lithuania also fought 
against the Bermondt-Avalov army, a German-sponsored group 
of military adventurers that sought to preserve German influ- 
ence in the Baltic region, and against Russia. In November 
1918, the Red Army invaded the country but ultimately was 
repulsed by the forces of the young Lithuanian government. 
On July 9, 1920, Soviet leader Vladimir I. Lenin signed a peace 
treaty with Lithuania, "forever" denouncing Russia's claims to 
the territory and recognizing the Lithuanian state. 

In the early 1920s, Lithuania had a border dispute with Ger- 
many. The city and region of Klaipeda (Memel in German) 
had been under German rule for 700 years. Originally inhab- 
ited by Lithuanians, it was detached from Germany in 1919 by 
the Treaty of Versailles and placed under French administra- 



179 



Estonia, Latvia, and Lithuania: Country Studies 

tion. In 1923 Lithuanians organized an insurrection and took 
over the Klaipeda region. 

These conflicts burdened Lithuania's international diplo- 
macy. Domestically, however, they fed the development of 
national identity and cultural awareness, displacing German 
and Polish influence. 

Lithuania's early disorganization caused a delay in its recog- 
nition by Western powers; the last to do so was the United 
States in 1922. Washington recognized Lithuania's indepen- 
dence only after it had become clear that Western intervention 
in Russia could not restore the Russian Empire and that the 
communists were firmly entrenched in Moscow. 

Independent Lithuania, led by political leaders mostly in 
their thirties or early forties, became a democratic republic 
with a strong legislature, a weak executive, a multiparty system, 
and a proportional system of representation. Christian Demo- 
cratic coalitions dominated the democratic period. However, 
almost a third of the country was illiterate, and farmers — 87 
percent of the population — were conservative and unfamiliar 
with democratic processes. In 1926 the Socialist-Populist coali- 
tion government was removed by a military coup. Antanas 
Smetona, a former acting president, was elected to the presi- 
dency by a rump parliament. Within three years, he established 
an authoritarian regime. Political parties were outlawed and 
the press censored, but Smetona did not completely suppress 
civil rights. Smetona established Tautininkai, a nationalist polit- 
ical party, which reappeared in the parliament in 1991 after 
Lithuania regained independence from the Soviet Union. 

From 1920 to 1940, independent Lithuania made great 
strides in nation building and development. A progressive land 
reform program was introduced in 1922, a cooperative move- 
ment was organized, and a strong currency and conservative 
fiscal management were maintained. Schools and universities 
were established (there had been no institutions of higher edu- 
cation and very few secondary schools under Russian rule), 
and illiteracy was substantially reduced. Artists and writers of 
the period produced works that have become classics. 

The Soviet Republic 

On August 23, 1939, Joseph V. Stalin and Adolf Hitler con- 
cluded the notorious Nazi-Soviet Nonaggression Pact (also 
known as the Molotov-Ribbentrop Pact). The agreement had a 
secret protocol that divided Poland, much of Central Europe, 



180 



Lithuania 



and the Baltic states between Germany and the Soviet Union. 
Lithuania, at first assigned to the German sphere of influence, 
in September was transferred to the Soviet Union. In October 
1939, the Soviet Union forced on Lithuania a nonaggression 
pact that allowed Moscow to garrison 20,000 troops in the 
country. In return, the city of Vilnius, now occupied by Soviet 
troops, was granted to Lithuania. On June 15, 1940, Lithuania 
was overrun by the Red Army. At first a procommunist, so- 
called people's government was installed, and elections to a 
new parliament were organized. The elections were noncom- 
petitive; a single approved list of candidates was presented to 
the voters. The parliament met on July 21, declared Soviet rule, 
and "joined" the Soviet Union as the Lithuanian Soviet Social- 
ist Republic on August 6, 1940. The United States and many 
other countries refused to recognize the Soviet occupation. 

Soviet rule brought about radical political and economic 
changes and Stalinist terror, which culminated in deportations 
to Siberia of more than 30,000 people on the night of June 14— 
15, 1941. Germany interrupted the Stalinist terror by attacking 
the Soviet Union on June 22, 1941. The next day, the Lithua- 
nian Activist Front, an organization of anti-Soviet resistance 
groups, revolted against the Soviet occupiers. Partisans took 
over the largest cities — Kaunas and Vilnius — and declared res- 
toration of Lithuanian independence. The Germans replaced 
the provisional government with a Lithuanian Vertrauensrat 
(Council of Trustees), which was headed by an ethnic Lithua- 
nian, General Petras Kubiliunas, and was given some autonomy 
in local affairs. 

The Lithuanian leadership went underground. An anti-Nazi 
resistance movement developed, publishing underground 
newspapers, organizing economic boycotts, and gathering 
arms. The resistance hoped that after victory the Western allies 
would insist on the restoration of Lithuanian statehood. 

A Soviet-sponsored underground also existed in Lithuania 
beginning in 1942. It staged military raids against German 
transportation, administrative, and economic enterprises. The 
Soviet forces were aided by the remnants of the Communist 
Party of Lithuania, now barely surviving in the underground. 

The nationalist Lithuanian resistance was supported by 
many Lithuanian political parties and resistance groups, 
including the Social Democrats and a coalition known as the 
Supreme Committee for the Liberation of Lithuania, which 
continued its activities many years after Lithuania was retaken 



181 



Estonia, Latvia, and Lithuania: Country Studies 

by the Red Army. In 1943 this resistance frustrated German 
efforts at organizing a Lithuanian Schutz-Staffel (SS) legion. 
The Nazis responded by arresting Lithuanian nationalists and 
by closing universities. Moreover, occupation authorities suc- 
ceeded, in the period 1941-44, in recruiting or capturing tens 
of thousands of people to work in Germany or to serve in the 
German military. Many perished in prisons or concentration 
camps. The main victims, however, were members of Lithua- 
nia's Jewish community. About 185,000 Jews, or 85 percent of 
the community's population, were massacred by Nazi squads, 
which were helped by Lithuanian collaborators in a number of 
localities. 

Soviet armies recaptured Lithuania in the summer of 1944, 
although Klaipeda did not fall until January 1945. Antanas 
Snieckus, the Communist Party of Lithuania leader, returned 
from Moscow with the other officials who had fled before the 
advancing German armies. Lithuania's full Sovietization, how- 
ever, was obstructed from 1944 to 1952 by an armed partisan 
resistance movement, which cost an estimated 20,000 to 30,000 
partisan casualties. 

Soviet rule in Lithuania displayed well-known features of 
communist rule. The party had a monopoly on power, and the 
management of the economy was centralized. The regime col- 
lectivized agriculture from 1947 to 1951. Secret police terror- 
ized the society and attempted to transfer Lithuanian nation- 
alist loyalties to the communists. Deportations to Siberia were 
resumed. Religion was brutally suppressed. One Roman Catho- 
lic bishop was shot, one perished in prison, two died shortly 
after release, and two were banished for more than thirty years, 
leaving only one in office. Almost one-third of the clergy was 
deported, although survivors were allowed to return after Sta- 
lin's death in 1953. Eventually, the training of new priests was 
essentially stopped. 

Institutions of power — the party, the secret police, and the 
government — at first were mainly in Russian hands. In the post- 
war period, ethnic Lithuanians constituted only 18.4 percent of 
the republic's communist party members. Beginning in the 
1950s, college graduates and those who wanted to make 
careers in economic, cultural, or political life realized that the 
Soviet system was not transitory, so they joined the communist 
party. The party swelled to a membership of 205,000 by 1989, 
but most of these members were opportunists, very different 
from the few revolutionary fanatics who had administered 



182 



Hill of Crosses, near Siauliai, symbolizes defiance of Soviet rule. 

Courtesy Jonas Tamulaitis 

Lithuania in the immediate postwar period. Still others joined 
the party in the expectation that they would be of better use to 
the preservation of Lithuanian traditions, language, and cul- 
ture in the ranks of the ruling group. There developed a stra- 
tum of communists who wanted to promote not only Moscow's 
but also Lithuania's advantage. 

Underground resistance never disappeared, although the 
armed underground was destroyed. As a movement, resistance 
was first sparked by efforts to defend the Roman Catholic 
Church. After the Soviet invasion of Czechoslovakia in 1968, 
which led to increased repression in the Soviet Union, the dissi- 
dent movement spread. In the 1970s, Lithuania had numerous 
underground publications. The most significant and regularly 
published among them was The Chronicle of the Catholic Church of 
Lithuania. It was never uncovered by the Soviet secret police, 
the Committee for State Security (Komitet gosudarstvennoy 



183 



Estonia, Latvia, and Lithuania: Country Studies 

bezopasnosti — KGB), and was published for twenty years. In 
1972 a young student, Romas Kalanta, immolated himself in 
protest against Soviet rule. Army units had to be sent in to 
quell a street rebellion by students that followed the self-immo- 
lation. The Committee for the Defense of Religious Rights and 
the Helsinki Watch Committee were established in the under- 
ground. Dissident work brought arrests and imprisonment. At 
the same time, the Lithuanian intelligentsia, especially writers 
and artists, demanded greater freedom of creative expression 
and protection of the Lithuanian language, traditions, and cul- 
tural values from the pressure to Russify that intensified during 
the administration of Leonid I. Brezhnev (1964-82). 

The Move Toward Independence, 1987-91 

The situation did not change until Mikhail S. Gorbachev 
came to power in 1985. Even then, Lithuania's communist 
party leadership hesitated to embrace Gorbachev's program of 
limited economic reforms under his policy of perestroika (see 
Glossary). The death of Petras Griskevicius, first secretary of 
the Communist Party of Lithuania, in 1987 did little to improve 
the atmosphere for reform. The new first secretary, Ringaudas 
Songaila, was a conservative functionary. But encouraged by 
new winds from Moscow, Baltic dissidents began in 1987 to 
hold public demonstrations in Riga, Tallinn, and Vilnius. In 
1988, against the wishes of Songaila's regime, Lithuanian, 
engaged in widespread celebration of the February 16 Inde- 
pendence Day. Lithuanian intellectuals were pushed into tak- 
ing more forceful action as well. Meeting at the Academy of 
Sciences on June 3, 1988, communist and noncommunist intel- 
lectuals formed "an initiative group" to organize a movement 
to support Gorbachev's program of glasnost (see Glossary), 
democratization, and perestroika. A council composed equally of 
communist party members and nonparty members was chosen 
to organize the Lithuanian Reconstruction Movement, which 
became known subsequently simply as Sajudis (Movement). 
The Communist Party of Lithuania leadership did not like this 
independent action but, knowing Gorbachev's limited accep- 
tance of "informal" societies, did not interfere with the effort. 

The movement supported Gorbachev's policies, but at the 
same time it promoted Lithuanian national issues such as resto- 
ration of the Lithuanian language as the "official" language. Its 
demands included revelations of the truth about the Stalinist 
years, protection of the environment, cessation of construction 



184 



Lithuania 



on a third nuclear reactor at the Ignalina nuclear power plant, 
and disclosure of secret protocols of the Nazi-Soviet Nonag- 
gression Pact. Sajudis used mass meetings to advance its goals. 
At first, party leaders shunned these meetings, but by mid-1988 
their participation became a political necessity. Thus, a Sajudis 
rally on June 24, 1988, was attended by Algirdas Brazauskas, 
then party secretary for industrial affairs. 

In October 1988, Brazauskas was appointed first secretary of 
the party to replace Songaila, and Sajudis held its founding 
conference in Vilnius. It subsequently elected as its chairman 
Vytautas Landsbergis, a professor of musicology who was not a 
member of the communist party. In the elections to Moscow's 
newly authorized Congress of People's Deputies (see Glossary) 
in March-May 1989, Sajudis was victorious. From the commu- 
nist party, the voters elected only Brazauskas and Vladimiras 
Beriozovas, his associate, whom Sajudis did not oppose. From 
that time, Brazauskas cooperated fully with Sajudis. Lithuanian 
sovereignty — as distinguished from Lithuanian independence, 
which had been declared on February 16, 1918 — was pro- 
claimed in May 1989, and Lithuania's incorporation into the 
Soviet Union was declared illegal. In August a human chain 
from Tallinn to Vilnius commemorated the fiftieth anniversary 
of the Nazi-Soviet Nonaggression Pact. In December Brazaus- 
kas forced the Communist Party of Lithuania to secede from 
the Communist Party of the Soviet Union and to give up its 
monopoly on power. 

But even the separation of the Communist Party of Lithua- 
nia from Moscow did not save it in the electoral contest for the 
Supreme Soviet of the republic in March 1990. In the election, 
the Communist Party of Lithuania won only twenty-three of the 
141 seats. On March 11, the newly elected parliament voted 
unanimously for independence. Brazauskas lost the election 
for chairman of the presidium of the Supreme Soviet to Lands- 
bergis. 

Moscow did not accept the legality of the independence 
vote, however; in April 1990, it imposed an economic blockade 
that lasted for three months, until the Lithuanian legislature, 
now known as the Supreme Council, agreed to a six-month 
moratorium on its independence declaration. Later, Moscow 
obstructed Lithuanian efforts to gain Western recognition, and 
on January 13, 1991, attempted to use force to remove the 
Lithuanian government in Vilnius and to reestablish Soviet 
rule. Although this attempted coup ended in a massacre of 



185 



Estonia, Latvia, and Lithuania: Country Studies 

civilians — thirteen died, and hundreds were wounded — by the 
Soviet army, Lithuania's determination did not change. Finally, 
the failure of the August 1991 coup in Moscow permitted 
Lithuania to regain self-determination and prompted the inter- 
national community to recognize it as an independent state. 
The United States extended recognition on September 2, and 
the Soviet Union did so on September 6. Lithuania was admit- 
ted to the United Nations on September 16, 1991. 

Physical Environment 

Lithuania is situated on the eastern shore of the Baltic Sea. 
Lithuania's boundaries have changed several times since 1918, 
but they have been stable since 1945 (see fig. 2). Currently, 
Lithuania covers an area of about 65,200 square kilometers. 
About the size of West Virginia, it is larger than Belgium, Den- 
mark, the Netherlands, or Switzerland. 

Lithuania's northern neighbor is Latvia. The two countries 
share a border that extends 453 kilometers. Lithuania's eastern 
border with Belarus is longer, stretching 502 kilometers. The 
border with Poland on the south is relatively short, only ninety- 
one kilometers, but is very busy because of international traffic. 
Lithuania also has a 227-kilometer border with Russia. Russian 
territory adjacent to Lithuania is Kaliningrad Oblast, which is 
the northern part of the former German East Prussia, includ- 
ing the city of Kaliningrad. Finally, Lithuania has 108 kilome- 
ters of Baltic seashore with an ice-free harbor at Klaipeda. The 
Baltic coast offers sandy beaches and pine forests and attracts 
thousands of vacationers. 

Topography, Drainage, and Climate 

Lithuania lies at the edge of the East European Plain. Its 
landscape was shaped by the glaciers of the last Ice Age. Lithua- 
nia's terrain is an alternation of moderate lowlands and high- 
lands.The highest elevation is 297 meters above sea level, 
found in the eastern part of the republic and separated from 
the uplands of the western region of Zemaiciai by the very fer- 
tile plains of the southwestern and central regions. The land- 
scape is punctuated by 2,833 lakes larger than one hectare and 
an additional 1,600 ponds smaller than one hectare. The 
majority of the lakes are found in the eastern part of the coun- 
try. Lithuania also has 758 rivers longer than ten kilometers. 
The largest river is the Nemunas (total length 917 kilometers), 



186 



Memorial in Vilnius to Lithuanians killed during the Soviet assault 
on the city's television-radio station in January 1991 

Courtesy Maya Laurinaitis 

which originates in Belarus. The other larger waterways are the 
Neris (510 kilometers), Venta (346 kilometers), and Sesupe 
(298 kilometers) rivers. However, only 600 kilometers of 
Lithuania's rivers are navigable. 

The country's climate, which ranges between maritime and 
continental, is relatively mild. Average temperatures on the 
coast are 1.6°C in January and 17.8°C in July. In Vilnius the 
average temperatures are 2.1°C in January and 18.1°C in July. 
Average annual precipitation is 71 7 millimeters on the coast 
and 490 millimeters in the eastern part of the country. The 
growing season lasts 202 days in the western part of the country 
and 169 days in the eastern part. 

Once a heavily forested land, Lithuania's territory today con- 
sists of only 28 percent woodlands — mainly pine, spruce, and 
birch forests. Ash and oak are very scarce. The forests are rich 
in mushrooms and berries. 

The Environment 

Concerned with environmental deterioration, Lithuanian 
governments have created several national parks and reserva- 



187 



Estonia, Latvia, and Lithuania: Country Studies 

tions. The country's flora and fauna have suffered, however, 
from an almost fanatical drainage of land for agricultural use. 
Environmental problems of a different nature were created by 
the development of environmentally unsafe industries, includ- 
ing the Ignalina nuclear power plant, which still operates two 
reactors similar to those at Chornobyl' (Chernobyl 1 in Rus- 
sian), and the chemical and other industries that pollute the 
air and empty wastes into rivers and lakes. According to calcula- 
tions by experts, about one-third of Lithuanian territory is cov- 
ered by polluted air at any given time. Problems exist mainly in 
the cities, such as Vilnius, Kaunas, Jonava, Mazeikiai, Elek- 
trenai, and Naujoji Akmene — the sites of fertilizer and other 
chemical plants, an oil refinery, power station, and a cement 
factory. Water quality also is poor. The city of Kaunas, with a 
population of more than 400,000, still has no water purification 
plant. Only one-quarter of sewage-contaminated water in the 
republic is processed because cleaning facilities are not yet 
available. River and lake pollution also is a legacy of Soviet care- 
lessness with the environment. The Kursiu Marios (Courland 
Lagoon), for example, separated from the Baltic Sea by a strip 
of high dunes and pine forests, is about 85 percent contami- 
nated. Beaches in the Baltic resorts, such as the well-known 
vacation area of Palanga, are frequently closed for swimming 
because of contamination. Forests affected by acid rain are 
found in the vicinity of Jonava, Mazeikiai, and Elektrenai, 
which are the chemical, oil, and power-generation centers. 

As a Soviet republic, Lithuania was among the first to intro- 
duce environmental regulations. However, because of Mos- 
cow's emphasis on increasing production and because of 
numerous local violations, technological backwardness, and 
political apathy, serious environmental problems now exist. 

Natural Resources 

Lithuania's landscape is pleasing to the eye but modest in 
natural resources. The republic has an abundance of lime- 
stone, clay, quartz sand, gypsum sand, and dolomite, which are 
suitable for making high-quality cement, glass, and ceramics. 
There also is an ample supply of mineral water, but energy 
sources and industrial materials are all in short supply. Oil was 
discovered in Lithuania in the 1950s, but only a few wells oper- 
ate, and all that do are located in the western part of the coun- 
try. It is estimated that the Baltic Sea shelf and the western 
region of Lithuania hold commercially viable amounts of oil, 



188 



Lithuania 



but when exploited this oil will satisfy only about 20 percent of 
Lithuania's annual need for petroleum products for the next 
twenty years. Lithuania has a large amount of thermal energy 
along the Baltic Sea coast, however, which could be used to 
heat hundreds of thousands of homes, as is done in Iceland. In 
addition, iron ore deposits have been found in the southern 
region of Lithuania. But commercial exploitation of these 
deposits probably would require strip mining, which is environ- 
mentally unsound. Moreover, exploitation of these resources 
will depend on Lithuania's ability to attract capital and technol- 
ogy from abroad. 

Society 
Population 

In 1995 Lithuania had an estimated population of 3,717,000, 
which was 44,000 fewer people than in 1992. Of the total, 
females were in the majority, as in most Central European 
countries and in Russia. The population group that has 
increased most quickly in Lithuania, as in many other relatively 
developed countries, consists of senior citizens and pensioners 
(those over age sixty) (see fig. 12). For example, pensioners 
grew in number from 546,000 to 906,000 between 1970 and 
1991. This group grew from 17.3 percent of the population in 
1980 to 19.5 percent in 1992. The zero-to-fifteen-year-old age- 
group, by comparison, diminished slightly from 25.2 percent in 
1980 to 23.9 in 1992, not as a result of increased mortality but 
as a result of a continuing decline in the birth rate. The group 
of working-age people (aged sixteen to fifty-nine for men and 
fifteen to fifty-four for women) also decreased, from 57.5 per- 
cent to 56.6 percent. The birth rate decreased from 17.6 per 
1,000 population in 1970 to 12.5 per 1,000 population in 1993 
and 12.0 per 1,000 population in 1994. Mortality increased 
from 10.5 per 1,000 population in 1980 to 10.9 in 1991 and 
12.8 in 1994. Life expectancy in 1993 was 63.3 years for males 
and 75.0 years for females, or an average of 69.1 years. This, 
too, was on the decline from the peak years of 1986-87, when 
the average was 72.5 years (67.9 years for males and 76.6 years 
for females). The decrease coincides with the worsening eco- 
nomic situation and the decline in the quality of health ser- 
vices during the postindependence economic transition. 

The average Lithuanian family is still somewhat larger than 
families in the neighboring Baltic states, but it has been declin- 



189 



Estonia, Latvia, and Lithuania: Country Studies 



AGE-GROUP 




200 150 100 50 50 100 150 200 



POPULATION IN THOUSANDS 



Source: Based on information from Lithuania, Lietuvos statistikos departamentas, Social 
and Economic Development in Lithuania, January- March 1994, Vilnius, 1994, 8. 

Figure 12. Population of Lithuania by Age and Gender, 1994 

ing. The average family size shrank to 3.2 by 1989. People 
marry young, but their marriages are often quickly dissolved. 
The divorce rate has been increasing. In 1989, of 9.3 marriages 
per 1,000 population, there were 3.3 divorces. The highest 
divorce rate is among ethnic Russians and in ethnically mixed 
families. These statistics indicate the existence of social prob- 
lems with which society has been ill equipped to deal. 
Churches are not allowed to intervene to address these prob- 
lems, and the profession of social work is still virtually nonexist- 
ent. The postcommunist government must face the formidable 
task of developing a social work sector. 

Under Soviet rule, especially in the last decade, one-half or 
more of the annual population increase resulted from immi- 
gration, primarily from Russia. But this situation has changed. 
More people emigrate to former Soviet republics than arrive 
from them, and more people leave for the West than come 
from there. In 1990 Lithuania's net migration loss to former 



190 



Lithuania 



Soviet republics was 6,345. Loss to the West includes Jewish 
emigration. Gains from the West include returning Americans 
and Canadians of Lithuanian descent. 

Soviet industrialization brought about fast and sustained 
urban development. Annually, almost 1 percent of the rural 
population has moved to cities since the early 1950s. In 1939 
only 23 percent of the population lived in cities; in 1992 the 
urban percentage was 69. Lithuania has five cities with a popu- 
lation of more than 100,000. The largest is the capital, Vilnius, 
established in 1321 (1994 population 584,000); Kaunas, the 
capital between the two world wars, founded in 1361 (1994 
population 424,000); the port city of Klaipeda, established in 
1252 (1994 population 205,000); the center of the electronics 
industry, Siauliai, founded in 1236 (1994 population 147,000); 
and the city of chemical and automobile parts industries, Pan- 
evezys, founded in 1548 (1994 population 132,000). 

In 1994, according to official estimates, 81.1 percent of 
Lithuania's population consisted of ethnic Lithuanians. The 
remaining 18.9 percent was divided among Russians (8.5 per- 
cent), Poles (7.0 percent), Belarusians (1.5 percent), Ukraini- 
ans (1.0 percent), and others, including Jews, Latvians, Tatars, 
Gypsies, Germans, and Estonians (0.9 percent). Altogether, 
people of more than 100 nationalities live in Lithuania. 

The proportion of the ethnic Lithuanian population — more 
than 90 percent of whom speak Lithuanian — stayed at 80 per- 
cent or a fraction higher until 1989, when it dropped slightly 
below 80 percent. The decrease resulted in fears that a pattern 
of decline would develop as a result of increasing Russian 
immigration, which might endanger the survival of Lithuania's 
culture and national identity as it did in Estonia and Latvia. 

The Russian minority consists of old and new immigrants. 
Many Russians settled in Lithuania in the nineteenth century 
or in the early twentieth century, shortly after the Bolsheviks 
came to power in Moscow. Two-thirds of the Russian minority, 
however, are immigrants — or their descendants — of the Soviet 
era, many of whom regard Lithuania as their homeland. They 
usually live in larger cities. In Vilnius 20.2 percent of the popu- 
lation was Russian in 1989. The same year, in Klaipeda, 28.2 
percent of the inhabitants were Russians; in Siauliai, 10.5 per- 
cent. Ignalina, where the nuclear power plant is located, had a 
Russian majority of 64.2 percent. Less than 10 percent of the 
population in Kaunas and the resort towns of Druskininkai, 
Palanga, or Neringa was Russian, however. These percentages 



191 



Estonia, Latvia, and Lithuania: Country Studies 

most likely will decline slightly in the 1990s because some Rus- 
sians, finding it difficult to accept that they live in a "foreign" 
country, are leaving Lithuania. The majority of Russians, how- 
ever, have shown little inclination to leave; 88 percent of those 
polled in the fall of 1993 described relations between their 
group and the ethnic Lithuanian population as good, and 
more than 60 percent felt that economic conditions for people 
like themselves would be worse in Russia than in Lithuania. 

Poles live primarily in the city of Vilnius (18.8 percent of 
Vilnius's population in 1989) and in three adjacent rural dis- 
tricts. In 1989 the ethnic Polish population in the Salcininkai 
district constituted 79.6 percent; in the rural district of Vilnius, 
it was 63.5 percent; and in the district of Trakai, it was 23.8 per- 
cent. Small Polish groups also live in a number of other locali- 
ties. Since the late 1940s, the Polish presence in Lithuania has 
declined considerably. About 200,000 Poles left Lithuania for 
Poland in 1946, under an agreement signed between Warsaw 
and Vilnius. Afterward, the Polish percentage of Lithuania's 
population declined from 8.5 percent in 1959 to 7.0 percent in 
1989, primarily as a result of the influx of Russians. The Polish 
population of eastern Lithuania is composed of inhabitants 
whose families settled there centuries ago, of immigrants who 
came from Poland in the nineteenth and early twentieth centu- 
ries when the region was part of Poland, and of many assimi- 
lated Lithuanians and Belarusians. 

Jews began settling in Lithuania in the fourteenth century. 
In time, Vilnius and some other cities became centers of Jewish 
learning, and Vilnius was internationally known as the Jerusa- 
lem of the North. Between the two world wars, Jews developed 
an active educational and cultural life. The Jewish community, 
which did not experience large-scale persecution until World 
War II, was almost entirely liquidated during the Nazi occupa- 
tion. In 1989 only 12,400 Jews were left in Lithuania, and emi- 
gration after independence had cut their number to an 
estimated 6,500 by 1994. 

For centuries, Vilnius has been an ethnically diverse city. His- 
torically, the city has served as a cultural center for Lithua- 
nians, Poles, Jews, and Belorussians. In the sixteenth and early 
seventeenth centuries, it also was a center of Ukrainian reli- 
gious and cultural life. At the turn of the century, the largest 
minority ethnic group was Jewish. After World War II, the larg- 
est minority ethnic group was Polish. The population of Vilnius 



192 




Main pedestrian thoroughfare in downtown Kaunas 

Courtesy Judith Gefter 
Kalvariju Market in Vilnius 
Courtesy Jonas Tamulaitis 



193 



Estonia, Latvia, and Lithuania: Country Studies 

in 1989 was 50.5 percent Lithuanian, 20.2 percent Russian, 
18.8 percent Polish, and 5.3 percent Belorussian. 

Health and Welfare 

The Lithuanian constitution of 1992 provides guarantees of 
social rights that were earlier provided by the Soviet regime. 
The constitution puts special emphasis on the maintenance 
and care of the family. It expresses in detail, for example, the 
guarantee for working mothers to receive paid leave before 
and after childbirth (Article 39). The constitution provides for 
free public education in all state schools, including schools of 
higher education (Article 41). The constitution forbids forced 
labor (Article 48); legalizes labor unions and the right to strike 
(Articles 50 and 51); guarantees annual paid vacations (Article 
49) ; and guarantees old-age and disability pensions, unemploy- 
ment and sick leave compensation, and support for widows and 
families that have lost their head of household, as well as for 
others in situations as defined by law (Article 52). Finally, the 
constitution guarantees free medical care (Article 53) . 

All political groups support these guarantees — considered 
more or less inviolable — although it is not clear to what extent 
the government will be able to fund the promised services dur- 
ing the continuing economic transition. The amounts of sup- 
port and the quality of services have declined from the modest, 
but always predictable, level first established in the Soviet 
period. 

The national system of social security consists of programs of 
social insurance and social benefits designed to continue the 
benefits provided by the Soviet system. Social insurance 
includes old-age retirement; survivor and disability pensions; 
unemployment compensation; pregnancy, childbirth, and 
child supplements; certain welfare support; and free medical 
care. It is cradle-to-grave insurance. According to a 1990 law, 
payments cannot be lower than necessary for a "minimal" living 
standard. In 1990 old-age and disability pensions in Lithuania 
were slightly more generous than in Estonia and Latvia. The 
budget for the program is separate from the national and local 
budgets. Only military pensions and some other special pen- 
sions are paid from the national budget. 

Social insurance is financed, according to a law passed in 
1991, from required payments by workers and employers, from 
income generated by the management of state social insurance 
activities, and from budgetary supplements by the state if the 



194 



Lithuania 



program threatens to run a deficit. To be eligible for an old-age 
pension, a male worker must be at least sixty years of age and 
have at least a twenty-five-year record of employment. A woman 
must be fifty-five and have a record of twenty years of employ- 
ment. This category of recipients includes not only factory and 
government workers but also farmers and farm workers. 

A program of social benefits is financed by local govern- 
ments. It includes support payments for women during preg- 
nancy and childbirth and for expenses after the child's birth. 
The program features single payments for each newly born 
child, as well as child support for single parents or families. 
These latter payments continue up to age limits established by 
law. The state also maintains a number of orphanages, sanatori- 
ums, and old-age homes. 

In the medical field, Lithuania has sufficient facilities to ful- 
fill the guarantee of free medical care. In 1990 the country had 
more than 14,700 physicians and 2,300 dentists; its ratio of 
forty-six physicians and dentists combined per 10,000 inhabit- 
ants compared favorably with that of most advanced countries. 
In addition, in 1990 Lithuania had more than 47,000 paramed- 
ical personnel, or 127 per 10,000 population and 46,200 hospi- 
tal beds, or 124 beds per 10,000 population. In the medical 
profession, Lithuania's cardiologists are among the most 
advanced in the former Soviet Union. In 1987 the first heart 
transplant operation was performed at the cardiac surgery 
clinic of Vilnius University. Hundreds of kidney transplants 
have been performed as well. One reasonably reliable and gen- 
erally used indicator of the quality of a country's health ser- 
vices system is infant mortality. In 1990 Lithuania's infant 
mortality rate of 10.3 per 1,000 population was among the low- 
est of the Soviet republics but higher than that of many West 
European countries. 

Special features of Lithuania's health status are high alcohol- 
ism (191 cases per 100,000 persons), low drug abuse (3.1 cases 
per 100,000), and few cases of human immunodeficiency virus 
(HIV) infection. Reported cases of HIV in 1992 were under 
100. The main causes of death are cardiovascular diseases, can- 
cer, accidents, and respiratory diseases. In addition to alcohol- 
ism, important risk factors for disease are smoking, a diet high 
in saturated fat, hypertension, and environmental pollution. 

Notwithstanding efficient ambulance service and emergency 
care, medical services and facilities in Lithuania suffer from a 
lack of equipment, supplies, and drugs, as well as from inertia 



195 



Estonia, Latvia, and Lithuania: Country Studies 

in the operation and administration of health services. The sys- 
tem is mainly state owned and state run. Private medical prac- 
tice, begun only in the late 1980s, has not progressed 
appreciably because of the economic crisis. Since 1989 the gov- 
ernment has encouraged church groups and others to enter 
the field of welfare services and medicine. The best-known 
such group is the Roman Catholic charitable organization Car- 
itas. 

Health care expenditures increased from 3.3 percent of the 
gross national product (GNP — see Glossary) in 1960 to 4.9 per- 
cent of GNP in 1990, but this figure is still low by world stan- 
dards. Lithuania is unable to afford investments to improve its 
health care infrastructure at this time. Lithuania needs human- 
itarian assistance from the world community in importing the 
most critically needed drugs and vaccines. Disease prevention 
needs to be emphasized, especially with regard to prenatal, 
pediatric, and dental care. To reduce the occurrence of preva- 
lent risk factors, the government needs to make fundamental 
improvements in public education and health programs. 

Lithuania's standard of living in the early 1990s was slightly 
below Estonia's and Latvia's but higher than in the rest of the 
former Soviet Union. At the end of 1992, the standard of living 
had declined substantially, however. Energy shortages caused 
severe limitations in heating apartments and providing hot 
water and electricity. Before the post-Soviet economic transi- 
tion, Lithuanians had abundant food supplies and consumed 
3,400 calories a day per capita, compared with 2,805 calories 
for Finns and 3,454 calories for Swedes. But an average Lithua- 
nian had only 19.1 square meters of apartment living space 
(less in the cities, more in rural areas), which was much less 
than the 30.5 square meters Finns had in the late 1980s. Hous- 
ing, moreover, had fewer amenities than in the Scandinavian 
countries; 75 percent of Lithuanian urban housing had run- 
ning water in 1989, 62 percent had hot water, 74 percent had 
central heating, 70 percent had flush toilets, and 64 percent 
had bathing facilities. Formerly low utility rates skyrocketed in 
the 1990s. Rents also increased, although by the end of 1992 
almost 90 percent of all state-owned housing (there was some 
privately owned housing under Soviet rule) had been priva- 
tized — bought from the state, mostly by those who lived there. 
In 1989 families were well equipped with radios and televisions 
(109 and 107 sets, respectively, per 100 families). Most had 
refrigerators (ninety-one per 100 families), and many had 



196 



Elderly woman on the 
outskirts of Druskininkai 
Courtesy Maya Laurinaitis 



washing machines (seventy), bicycles (eighty-four), vacuum 
cleaners (sixty), sewing machines (forty-eight), and tape re- 
corders (forty-four). Every third family had a private automo- 
bile (thirty-six automobiles per 100 families). Detracting from 
the quality of life, however, was the increasing rate of violent 
crime, especially in the larger cities (see Crime and Law En- 
forcement, this ch.). 

Religion 

Traditionally, Lithuania has been a Roman Catholic country. 
Although severely affected by Soviet repression, the Roman 
Catholic Church remains the dominant and the most influen- 
tial denomination. However, Lithuania in the past has had two 
small but active Protestant denominations, the Evangelical 
Reformed (Calvinist) and the Evangelical Lutheran. In addi- 
tion, Orthodox Christianity as well as Judaism have roots at 
least as old as those of Roman Catholicism. In 1991 a Western 
poll found that 69 percent of respondents in Lithuania identi- 
fied themselves as Roman Catholics (in 1939 the percentage 
was 85), 4 percent identified themselves as Orthodox, and 1 
percent professed Evangelical Christian beliefs. New in this 
self-identification was a large category — 25 percent — who did 
not profess any religion. Lithuanian journalists have also noted 



197 




198 



Skyline view of Kaunas 
Courtesy Maya Laurinaitis 



199 



Estonia, Latvia, and Lithuania: Country Studies 

that twenty-one out of the 141 new members of parliament 
elected in 1992 left out "so help me God" from the oath when 
sworn in as deputies. 

In 1992 Lithuania's Roman Catholic Church consisted of two 
archdioceses (Vilnius and Kaunas) and four dioceses (Kaisiado- 
rys, Panevezys, Vilkaviskis, and Telsiai). The church is presided 
over by Cardinal Vincentas Sladkevicius in Kaunas. For thirty 
years, Sladkevicius, then a bishop, was held by Soviet authori- 
ties in internal exile. The church has 688 parishes, two theolog- 
ical seminaries (one reestablished in 1990), and several con- 
vents and monasteries. There is also one Uniate, or Eastern- 
Rite Catholic, congregation. 

The archeparchy (archdiocese) of the Russian Orthodox 
Church has forty-five parishes and two monasteries. Arch- 
bishop Chrisostom and his archeparchy are under the jurisdic- 
tion of the Patriarch of Moscow. The Old Believers (see 
Glossary) have fifty-one congregations. The Lithuanian Evan- 
gelical Lutheran Church under Bishop Jonas Kalvanas has 
thirty-three congregations, and the Evangelical Reformed 
Church (Calvinist) has eight. Other Christian denominations 
include Baptists, Seventh-Day Adventists, and Pentecostals. The 
non-Christian religious groups include Jews (two communi- 
ties), Muslims (four communities), Krishna followers (two 
communities), and one Karaite (see Glossary) group. 

Traditionally, most Roman Catholics in Lithuania were 
either Lithuanians or Poles, and the Orthodox and Old 
Believer adherents were predominantly Russians. This division 
has not changed, although currently it is no longer possible to 
assume religious affiliation on the basis of ethnic identity. The 
Calvinist and Evangelical Lutheran groups are very small — an 
estimated 15,000 Calvinists and 35,000 Lutherans. The younger 
Protestant denominations are even smaller but are intensely 
active. Generally, Lithuanian society in the 1990s is secularized, 
although, as in many postcommunist countries, younger peo- 
ple are searching for some sort of spiritual fulfillment. 

The Roman Catholic Church is the oldest continuously sur- 
viving Lithuanian institution. As such, it has played a dominant 
role in the development of Lithuanian society, especially cru- 
cial during those long stretches of time when Lithuanians had 
no state of their own. At first highly influenced by the Polish 
community, the church under Bishop Motiejus Valancius in the 
nineteenth century promoted Lithuanian language and publi- 
cations, which prepared the country for the national awaken- 



200 



Lithuania 



ing of the 1880s. Because Russian imperial authorities had 
forbidden the publication of Lithuanian books in the Latin 
alphabet, Valancius had them printed in German-ruled, Protes- 
tant East Prussia and then smuggled into Lithuania. The 
bishop also organized a network of secret Lithuanian schools. 
In 1918 the church supported the establishment of Lithuania 
as an independent and democratic republic. Years later, it 
endorsed land reform, and in the 1930s the bishops opposed 
and restrained Smetona's authoritarian rule. Under Soviet 
rule, the church served as a focal point of resistance and dissi- 
dent activities. Its theological outlook, however, has been con- 
servative. 

Protestants also have contributed significantly to Lithuania's 
cultural development. The first book printed in Lithuanian was 
a Lutheran catechism, published by Martynas Mazvydas in East 
Prussia in 1547. Protestant Lithuanians from this region pub- 
lished the literature of national awakening. Later, Protestants — 
both Lutheran and Calvinist — supplied political leadership out 
of proportion to their numbers in the population. 

In Lithuania between the two world wars, the Roman Catho- 
lic Church and other denominations had a constitutionally 
guaranteed monopoly over registration of marriages, births, 
and deaths. Religious education in public schools was compul- 
sory. Although there was no established religion, all denomina- 
tions received some state support in rough proportion to their 
size. The Soviet authorities totally separated churches not only 
from the state but also from individual support. On June 12, 
1990, Lithuania's newly elected independent parliament 
adopted an act of restitution of the Roman Catholic Church's 
condition status quo ante but promised compensation for the 
losses suffered under Soviet rule and pledged cooperation on a 
parity basis. The constitution of 1992 guarantees "freedom of 
thought, religion, and conscience" to all and "recognizes tradi- 
tional churches and religious organizations of Lithuania." 
Other religious organizations have to pass a test to ensure that 
their teachings do not "contradict the law and morality." All 
recognized churches are guaranteed the rights of legal persons 
and can govern themselves without state interference. Reli- 
gious teaching in public schools is allowed if parents desire it. 
Religious marriage registration also is legally valid, as in the 
United States. The government maintains an office of counse- 
lor on religious affairs. 



201 



Estonia, Latvia, and Lithuania: Country Studies 

Language and Culture 

Like Latvian and Old Prussian, the Lithuanian language 
belongs to the Baltic branch of the Indo-European language 
family. The size of the territory in which Lithuanian was spo- 
ken shrank considerably through the ages. Today it is roughly 
coterminous with the boundaries of Lithuania except for some 
areas of Lithuanian speakers in Poland and Belarus, and 
except for the diaspora living in the United States, Canada, 
Western Europe, Latin America, Australia, and even Siberia. 

The medieval Lithuanian rulers did not develop a written 
form of the Lithuanian language. The literary Lithuanian lan- 
guage, based on a southwestern Lithuanian dialect, came into 
use during the last quarter of the nineteenth century, replacing 
the use of the Samogitian, or western Lithuanian, dialect. At 
the beginning of the twentieth century, the use of Lithuanian 
was confined mainly to the peasantry, but the language was 
revived subsequently. In 1988 it was declared the official lan- 
guage of Lithuania, as it had been during 1918-40 and the 
early years of Soviet rule. 

Unlike Estonia and Latvia, Lithuania's cultural development 
was affected by Poland rather than Germany. The imperial Rus- 
sian regime had an enormous impact on Lithuania from 1795 
to 1915, and the Soviet Union had similar influence from 1940 
to 1991. Direct contacts with western Europe also made signifi- 
cant contributions beginning in the sixteenth century. Lithua- 
nian nobility in the sixteenth to eighteenth centuries and 
Lithuanian intellectuals since the turn of the twentieth century 
brought back ideas and experiences from Italy, Germany, and 
France. Also, between the two world wars independent Lithua- 
nia's direct communication with western Europe affected the 
development of educational and religious institutions, the arts 
and literature, architecture, and social thought. Lithuania's his- 
torical heritage and the imprint of the Western outlook 
acquired in the twentieth century were strong enough to make 
Soviet citizens feel that by going to Lithuania they were going 
abroad, to the West. 

Lithuanian folk art, especially woodcarving and weaving, 
contributed to the growth of Lithuanian artistic development. 
Traditionally, Lithuanian folk artists carved mostly crosses, way- 
side chapels, and figures of a sorrowful Christ — very symbolic 
and characteristic of Lithuanian crossroads. Under Soviet rule, 
which outlawed religious subjects, woodcarvings became sec- 



202 



Religious ceremonies, such as this christening in Kaunas, became 
common as the communist regime disintegrated. 

Courtesy Jonas Tamulaitis 
Women at Roman Catholic mass in Druskininkai 
Courtesy Maya Laurinaitis 



203 



Estonia, Latvia, and Lithuania: Country Studies 

ular. Today, Lithuania's roads and gardens are dotted with 
wooden crosses, poles, and other carvings. 

Among Lithuanian artists, probably the best known is 
Mikalojus Ciurlionis (1875-1911), an originator of abstract 
painting and a composer whose music became the main sub- 
ject of study by Professor Vytautas Landsbergis, Lithuania's de 
facto president 1990-92 and a leader of the independence 
movement. During the Soviet period, Lithuanian art was best 
known for graphic arts and for stained glass windows, but the 
most prominent art forms included abstract painting, sculp- 
ture, commercial art, and amber jewelry. 

Lithuanian music is as ancient as its art. Folk music has had 
great influence on its development, and choral singing — peri- 
odically demonstrated in huge singing festivals — remains 
extremely popular. Lithuanian composers write not only choral 
but also symphonic, ballet, chamber, and opera music. A con- 
servatory, established in 1933, has contributed much to the 
development of musical culture. In addition to the conserva- 
tory, Lithuania supports four higher music schools, three art 
schools, two pedagogical music schools, eighty music schools 
for children, five symphony orchestras, ensembles for medieval 
and contemporary music, and an internationally known string 
quartet. Many instrumentalists and soloists are winners of inter- 
national prizes. Folk music ensembles also abound. 

Opera and ballet are important elements of Lithuania's 
national culture. Dancers are trained at the Vilnius School of 
Choreography and the Kaunas School of Music, as well as in 
Russia. 

All of these activities were state supported under the Soviet 
system. Membership in artistic associations usually assured 
work in the profession. All of this now has to be reorganized on 
a private basis, and both the state and the artists are struggling 
to find satisfactory working arrangements. Many supporters of 
the arts believe that art should be state-supported but not state 
controlled. 

The movie industry was established in the late 1940s. Lithua- 
nian filmmakers released four full-length films in 1989 and five 
in 1990; they also released twenty-eight short films, twenty-four 
newsreels, and four documentaries. Artistic photography has 
roots that are older than the Soviet regime in Lithuania. 

Sports are also a prevalent national pastime. Lithuania's 
most popular game is basketball, and a few Lithuanians play 
professionally in the United States and in European countries. 



204 



Lithuania 



Lithuania's individual athletes have won Olympic medals and 
routinely compete in European events. 

Education 

The population of Lithuania is highly educated. Virtually all 
those in the age-group fifteen to thirty-nine have completed 
basic schooling. The average level of education, however, grad- 
ually drops for those older than forty. Large numbers of stu- 
dents attend special schools and schools of higher education. 
In 1993 Lithuania had 67.3 students per 1,000 population in 
universities and other institutions of higher education, and 
46.4 in vocational schools. These numbers compared with 25.9 
and 49.0, respectively, for Estonian and Latvian university stu- 
dents and 18.6 and 36.1 for vocational school students. Lithua- 
nia had 106 university graduates per 1,000 population. 
Enrollment rates compared favorably with those in Western 
Europe. Lithuania had a literacy rate of 99 percent in 1994. 

Schools using Lithuanian as the language of instruction are 
a product of the twentieth century. The system of education — 
primary, secondary, and higher — was developed between the 
two world wars. Soviet officials further expanded it, added 
adult education, and severely ideologized and politicized the 
philosophy of education and the teaching process. Indepen- 
dent Lithuania has replaced a "Soviet school" with a "national 
school" philosophy, although the system still maintains some 
Soviet organizational features. Primary and secondary educa- 
tion together last twelve years. Three types of schools exist: 
schools that include grades one to four, those that include 
grades one to nine, and those that include grades one to 
twelve. Schooling begins at age six. Since 1978 secondary edu- 
cation has been compulsory. In 1993-94 there were 2,31 7 pri- 
mary and secondary schools, 108 secondary specialized institu- 
tions, and fifteen higher education institutions in the country. 
Separate schools exist with Russian or Polish as the language of 
instruction. 

Lithuania's "flagship" institution of higher learning is Vilnius 
University. Others include Vytautas Magnus University in Kau- 
nas, founded by the Lithuanian diaspora of the United States 
and based on the American model, and the new university in 
Klaipeda. Unlike the Soviet universities, Lithuanian universities 
are self-governing and have their autonomy guaranteed by law. 
The entire system of education is administered by the Ministry 
of Education and Culture. 



205 



Estonia, Latvia, and Lithuania: Country Studies 

Following Soviet practice, research and teaching functions 
in Lithuania are institutionally separated. Research is mainly 
conducted by the seventeen institutes of the Academy of Sci- 
ences. Altogether, in 1990 forty-six research institutes em- 
ployed 15,400 scientists. Research is relatively weak in the 
humanities and the social sciences. Probably the most interna- 
tionally distinguished activity in these fields is the study of Bal- 
tic linguistics under the aegis of the center for such studies in 
Vilnius. Studies in probability theory by the faculty of Vilnius 
University are internationally known, and important advances 
have been made in semiconductor physics and chemistry, bio- 
chemistry and genetics, studies related to various aspects of 
environmental protection, and other fields of the natural sci- 
ences and technology. Distinguished advanced research has 
been carried out in the fields of medicine (especially in cardio- 
vascular disease) and agriculture. Internationally, the best rec- 
ognized Lithuanian contribution is in biotechnology. 

Economy 

In the early and mid-1990s, Lithuania's economy went 
through a dynamic transition from the centralized economy 
prevalent during Soviet control of Lithuania to a market-driven 
economy dominated by private enterprise and oriented toward 
uade with Western Europe and North America. This transition 
began in 1991, and the volatile first stage — structural adjust- 
ment — was largely complete as of 1994. During this period, the 
economy declined precipitously while the Lithuanian govern- 
ment implemented fundamental economic reforms, including 
price reform, privatization, government reform, introduction 
of the litas (pi., litai) as the national currency (for value of the 
litas — see Glossary), and trade adjustment. Dependence on 
Russian energy hampered Lithuania's economy at a crucial 
time of transformation from the centralized state-run economy 
to a free-market system. Industrial production in Lithuania 
dropped by 36 percent from December 1992 through June 
1994. 

Despite these grim statistics, Prime Minister Adolfas Slezevi- 
cius was determined to adhere strictly to International Mone- 
tary Fund (IMF — see Glossary) recommendations for a speedy 
transition to a market economy. Slezevicius maintained that 
former socialist countries that did not rapidly reform fared far 
worse than those that did. The IMF noted that substantial 
progress had been achieved in Lithuania between 1992 and 



206 



Statue of Polish-Lithuanian 
poet Adam Mickiewicz 
(Adomas Mickevicius) in 
Vilnius 

Courtesy Chester Pavlovski 



1994 and that, after successfully reducing inflation, the country 
was ready to turn its attention to reforming its tax, privatiza- 
tion, social security, and finance policies. 

Economic recovery began at minimal levels in mid-1993 and 
continued subsequently as a result of an increase in foreign 
assistance, loans and investment, trade, and private-sector 
employment. Most foreign investment came from the United 
States, Russia, Germany, Britain, Austria, and Poland. 

Economic Reforms 

During the early 1990s, the government launched a compre- 
hensive program of market-oriented reforms, which included 
the privatization of state-owned enterprises, the lifting of price 
controls, land reform, and reform of the banking sector. Also, a 
new national currency, the litas, was introduced in June 1993. 

Privatization 

Privatization occurred at a rapid rate in the 1992-94 period 
(especially with respect to farmland, housing, and small enter- 
prises), and about half of the large and medium-size enter- 
prises scheduled for privatization were sold through public 
share offerings. The Law on Initial Privatization of State Prop- 
erty of the Republic of Lithuania, passed in early 1991 and 



207 



Estonia, Latvia, and Lithuania: Country Studies 

amended several times in 1993 (primarily with regard to land 
reform and restitution), served as the principal basis for under- 
taking privatization. To start the process, the law authorized 
the issuance of investment vouchers to residents of Lithuania, 
to be used for the purchase of housing or other property. Most 
housing property eligible for privatization had been privatized 
by the end of 1993. Large enterprises also were to be privatized, 
with priority given to purchases of shares by employees of those 
enterprises. The number of shares that employees had the 
right to purchase in companies being privatized was increased 
in 1993 from 30 percent of total shares to 50 percent. By 
November 1994, more than 5,000 enterprises, or 80 percent of 
the assets earmarked for privatization, had been sold off. 

Lithuania sought to regulate privatization of agriculture and 
to liquidate collective farms. The 1991 privatization law initi- 
ated agricultural land reform based on the proposition that 
nationalized land must be returned while unclaimed land 
could be sold to prospective private farms on long-term install- 
ment plans. Agricultural privatization proceeded rapidly; by 
the middle of 1993, some 83 percent of the agricultural privati- 
zation program had been completed. 

Corruption and violence occasionally marred the privatiza- 
tion process. There were difficulties with auction sales of enter- 
prises because speculators and organized crime conspired in 
bidding, bribed officials, or scared away competition with phys- 
ical threats. Nevertheless, by the middle of 1994 the govern- 
ment had privatized state property worth a total of 489 million 
litai (35 million litai in cash and 454 million litai in vouchers 
and other forms of compensation), allocating the cash 
received to national and local privatization funds. 

Land Reform 

The greatest difficulties in implementing Lithuania's privati- 
zation program were experienced in agriculture because rapid 
privatization caused fear and confusion in that sector. The laws 
provided for the dismemberment of collective farms but did 
not definitively ensure their replacement by at least equally 
productive private farms or corporations. The many small pri- 
vate farms that appeared on the landscape were inefficient. 
Conflicts frequently arose over title to land. Many new owners 
did not intend to cultivate the regained land or to actively 
engage in farming, and as a result tens of thousands of hectares 



208 



One of many newly privatized farms in Lithuania 
Courtesy Maya Laurinaitis 
Early morning milk pickup from farm in Panoviai 

Courtesy Victor Visockis 



209 



Estonia, Latvia, and Lithuania: Country Studies 

were left fallow. Collective farm managers and their friends 
stole or cheaply acquired tractors, cattle, and other property. 

Price Reform 

Inflation resulted from the lifting of price controls and from 
the shortages that resulted from trade disruption around the 
time of the collapse of the Soviet Union. Inflation, which was 
225 percent in 1991, increased to 1,100 percent in 1992, fell to 
409 percent in 1993, and dropped further to about 45 percent 
in 1994. Wages remained stable in 1991 but declined 30 per- 
cent in real terms in 1992. Prices increased several times more 
than wage and pension raises. 

Prime Minister Slezevicius coped with the high rate of infla- 
tion by avoiding the temptation to promise compensation to 
pensioners and others whose savings were wiped out by infla- 
tion. He also avoided giving in to demands for increased subsi- 
dies and support for utilities and public transportation, which 
traditionally had been provided by the central government. 
The opposition, led by former Prime Minister Gediminas 
Vagnorius, was pressing for compensation to savers and inves- 
tors, but the public voted not to support the measure in an 
August 1994 referendum. By adhering to Lithuania's structural 
adjustment program, which had been worked out in coopera- 
tion with the IMF, Slezevicius demonstrated his confidence in 
the reform process. 

Monetary and Fiscal Policy 

The litas was introduced as the new national currency on 
June 25, 1993. It became the sole legal tender in August 1993. 
The litas has been stable since then, maintaining a value of 4.0 
litai = US$1 since its introduction. 

Lithuania has made progress in reducing government 
expenditures to match government revenues. In March 1990, 
Lithuania began the difficult process of eliminating subsidies, 
introducing new taxes, and administering a new tax collection 
system. Personal income taxes, corporate profit taxes, and a 
value-added tax (VAT — see Glossary) were introduced. The 
personal income tax rate ranges from 18 to 33 percent. The 
corporate profit tax rate is 29 percent, with a discounted rate of 
24 percent on retained earnings and 10 percent on the earn- 
ings of agricultural enterprises. The VAT is 18 percent, and 
there are excise taxes on alcohol, tobacco, petroleum, furni- 
ture, jewelry, land, and other items and transactions. Lithuania 



210 



Lithuania 



has been reluctant to reduce its high tax burden for fear of fis- 
cal instability, but high taxes have led to an environment that 
encourages underreporting and corruption, stimulating the 
underground economy. 

The budget of the central government ran a deficit through- 
out the late 1980s. The amount of the deficit at that time was 
relatively small — about 3 percent of the gross domestic product 
(GDP — see Glossary). The central government ran a budget 
surplus of 3 percent of GDP in 1991. The budget had a surplus 
in 1993 but a slight deficit — 1 percent of GDP — in 1994. 

After independence in 1991, the government began to 
restructure its expenditures. Subsidies were reduced from 37 
percent of government expenditures in 1985 to 6 percent in 
1992, while expenditures for the social safety net (social secu- 
rity, welfare, housing, and communal activities) increased from 
15 percent to 32 percent of expenditures over the same period. 
These shifts in expenditures are a result of the central govern- 
ment's assumption of responsibility for the social safety net 
from enterprises that had been responsible for them during 
the Soviet period. Projected government expenditures in 1995 
equaled 26 percent of GDP. 

Reform of the Banking Sector 

Prime Minister Slezevicius acknowledged that weakness in 
the banking sector was one of the most important challenges 
for his government and, if not properly supervised, could limit 
long-term economic growth. Lithuania needs to do more to 
live up to this commitment. Despite several bank failures, the 
number of banks increased from twenty to twenty-six from 
1992 to 1994. 

Significant factors guiding the reform of the banking sector 
are the technical advice and assistance of the IMF, which in 
October 1994 granted Lithuania a three-year US$201 million 
credit, and the reforms required for membership in the Euro- 
pean Union (EU — see Glossary). The IMF has blamed the 
Bank of Lithuania's loose monetary policy in part for rising 
inflation. Some Western observers cite the central bank's insti- 
tutional weakness and lack of autonomy as the main reasons 
for its ineffectiveness. The EU requirements are set forth in a 
white paper that describes the sectoral conditions that each 
prospective member of the EU must satisfy prior to joining. 
These requirements touch on every sector of the economy. 
Membership in the EU is a primary goal of Lithuania's domes- 



211 



Estonia, Latvia, and Lithuania: Country Studies 

tic and national security policies. The white paper requires an 
efficient and open financial market and a banking system that 
encourages market-directed capital flows. Member states are 
required to pass and implement legislation concerning the 
soundness of banking institutions. 

Lithuania's 1994 reform program included a review of the 
bank licensing system, privatization of the three state banks 
(Savings Bank, Agricultural Bank, and State Commercial 
Bank), a review of capital requirements to ensure compliance 
with international standards, and the introduction of new 
plans for accounts at the Bank of Lithuania and for commer- 
cial banks. The program also called on the government to pass 
stronger bankruptcy legislation and to ensure its enforcement. 

Structure of the Economy 

After the Soviet Union took control of Lithuania's economy, 
it developed both light industry and heavy industry to tie 
Lithuania into the Soviet system. As a workshop for Moscow's 
military-industrial complex, Lithuania reaped significant 
rewards. Its people enjoyed one of the highest standards of liv- 
ing in the Soviet Union, similar to those of Estonia and Latvia. 
Especially on farms, goods became visibly more abundant and 
life grew more comfortable during the early 1970s. The reason 
was simple: Brezhnev's regime in Moscow reversed policies of 
farm exploitation and began subsidizing farmers instead. But a 
chronic shortage of necessities, the poor quality of goods, and 
the absence of many services kept the standard of living only at 
East European levels — not at those of the West. 

During their control of Lithuania, Soviet officials introduced 
a mixed industrial-agricultural economy. In 1991 industry pro- 
duced about half of GDP; agriculture and trade each supplied 
about one-quarter. 

Industry 

Lithuania's industrial sector produced 51.3 percent of GNP 
in 1991, but industrial production has subsequently experi- 
enced declines — by a reported 50 percent in 1993, for exam- 
ple. The sector employed 38 percent of the labor force in 1992. 

Under Soviet rule, most economic activity was centrally man- 
aged from Moscow; Lithuania managed only 10 percent of its 
industrial capacity. Many industrial firms worked for the mili- 
tary. According to President Algirdas Brazauskas, who for many 
years had managed Lithuania's industries as the communist 



212 



Lithuania 



party's secretary for industry, Lithuania had a leading position 
as a maker of electronics for military and civilian use, and it 
had been a major supplier of specialized military and industrial 
technology to the Soviet Union. 

In 1985, the year Gorbachev came to power, Lithuania 
accounted for just 0.3 percent of the Soviet Union's territory 
and 1.3 percent of its population, but it turned out a significant 
amount of the Soviet Union's industrial and agricultural prod- 
ucts: 22 percent of its electric welding apparatus, 11.1 percent 
of its metal-cutting lathes, 2.3 percent of its mineral fertilizers, 
4.8 percent of its alternating current electric motors, 2.0 per- 
cent of its paper, 2.4 percent of its furniture, 5.2 percent of its 
socks, 3.5 percent of underwear and knitwear, 1.4 percent of 
leather footwear, 5.3 percent of household refrigerators, 6.5 
percent of television sets, 3.7 percent of meat, 4.7 percent of 
butter, 1.8 percent of canned products, and 1.9 percent of 
sugar. 

Lithuania's key industrial sectors include energy (especially 
electric power generation), chemicals, machine building, met- 
al working, electronics, forestry products, construction materi- 
als and cement, food processing, and textiles (see table 27, 
Appendix). The country also has a ship-building capacity, with 
drydocks in Klaipeda for construction and repair of ocean- 
going fishing vessels. It has a large cement works and an oil- 
refining plant with an annual capacity of refining 11 million 
tons of oil. In the past, both facilities produced largely for 
export. Lithuania's electric energy comes from hydroelectric 
and thermal power plants fueled by coal and oil in Kaunas, Ele- 
ktrenai, Mazeikiai, and Vilnius, as well as a nuclear power plant 
at Ignalina (see fig. 13). 

Agriculture 

The agricultural sector contributed 24.0 percent of GDP in 
1992 and employed 19.0 percent of the labor force. Lithuania's 
agriculture, efficient by Soviet standards, produced a huge sur- 
plus that could not be consumed domestically. Traditionally, 
Lithuania grew grain (wheat, rye, barley, and feed grains), 
potatoes, flax, and sugar beets, and it developed dairy farming, 
meat production, and food processing. About 48 percent of the 
arable land was used for grain, 41 percent for forage crops, 5 
percent for potatoes, and 3 percent for flax and sugar beets. 
Crops accounted for one-third and livestock for two-thirds of 
the total value of agricultural output. Lithuanian agriculture, 



213 



Estonia, Latvia, and Lithuania: Country Studies 



International boundary \ Qu£f ofliiga / 

® National capital \^ 
• Populated place f>- x — " 

i>Vr"^^ RHP] ^ 



25 50 Kilome ters 
25 50 Miles 




LATVIA 



/ N 



Utena lli B / 



/ 
/ 

1 ) 



6 7 

7 Ignalina f 
Ukmerge y 7 

# 4j 

: adorys\ / j 



RUSSIA 



Marijampole 

A/ytus 

dIB 



/ 



POLAND 



Boundary representation 
not necessarily authoritative 



BELARUS 



Q 
I 

ft 



Machinery 
Light industry 
Food processing 
Glass 
Fishing 
Shipping 

Construction materials 




O 
# 



Chemicals 

Mineral fertilizer 

Dairying 

Sugar beets 

Potatoes 

Flax 

Peat 



Thermal power plant 

¥ Nuclear power plant 

ffe Refinery 

Electric powerline 

Crude oil pipeline 

Petroleum products pipeline 

Natural gas pipeline 



Figure 13. Economic Activity in Lithuania, 1995 



which was collectivized during the early years of Soviet rule, 
became relatively efficient in the late 1950s when Moscow 
granted the communist leadership in Vilnius greater control of 
agricultural policy. Lithuanian farm workers were 50 percent 



214 



Lithuania 



more productive than the Soviet average but much less produc- 
tive than their Western counterparts. Similarly, Lithuanian 
crop yields and milk production per cow, although very high by 
Soviet standards, ran either equal to or much below the yields 
obtained by Western farms. But even in Lithuania, one-third of 
agricultural production came from private plots of land and 
not from collective or state farms. Nevertheless, Lithuanian 
agricultural production was high enough to allow the export of 
about 50 percent of total output. 

Significant reforms were introduced in the early 1990s, par- 
ticularly after the restoration of independence, to reestablish 
private ownership and management in the agricultural sector. 
Although Lithuania succeeded in privatizing more agricultural 
land than Estonia or Latvia, agricultural production decreased 
by more than 50 percent from 1989 to 1994. One problem is 
that farms were broken up into smallholdings, averaging 8.8 
hectares in size, often not large enough to be economically via- 
ble. A serious drought in 1994 further reduced agricultural 
output and cost farmers an estimated 790 million litai in pro- 
duction. 

Energy and Minerals 

Lithuania receives more than 87 percent of its electricity 
from the Ignalina nuclear power plant. But Lithuania is highly 
dependent on fuels imported from Russia, and this energy 
dependence plagues Lithuania's industries. The trading rela- 
tionship is unstable because political factors determine 
whether or not the supply will be interrupted. Energy use in 
Lithuania is inefficient by world standards, given Lithuania's 
level of economic development. In 1991 about one-half of the 
electricity produced at the 5,680-megawatt Ignalina nuclear 
power plant was exported to Belarus, Latvia, and Kaliningrad 
Oblast in Russia. But, partly because of reduced demand in the 
former Soviet republics and partly for political reasons, Lithua- 
nia's electricity exports declined substantially from 1991 to 
1994. 

Lithuania has large processing facilities for oil, which can be 
exported to the West through Ventspils (Latvia) or the new 
Lithuanian transport and storage facility at Butinge. Butinge is 
equipped with modern technology and was constructed by 
Western firms with funding provided by international financial 
institutions. This facility may allow more intensive utilization of 
the oil-processing facility at Mazeikiai, which has an annual 



215 



Estonia, Latvia, and Lithuania: Country Studies 

capacity of 12 million tons, one of the largest in the Baltic 
region. Mazeikiai needs upgrading to operate profitably. 

With the exception of forests and agricultural land, Lithua- 
nia is poorly endowed with natural resources. It exports some 
chemical and petroleum products, but its only significant 
industrial raw materials are construction materials, such as clay, 
limestone, gravel, and sand. Its peat reserves total about 4 bil- 
lion cubic meters. There are moderate oil and gas deposits off- 
shore and on the coast. In 1993 recoverable oil reserves were 
estimated at 40 million tons on the coast and 38 million tons 
offshore. 

Tourism 

Lithuania may develop an important tourism industry if 
investments are made in its infrastructure to bring facilities up 
to Western standards. The resort town of Neringa was famous 
during the Soviet period for its excellent seaside climate. But 
Neringa fears the effects of too much foreign influence and 
wants special protection from an expected onslaught of foreign 
investors, most of whom come from Germany. In Vilnius and 
other cities, there is a shortage of quality hotels. State-owned 
hotels, of which there are still many, tend to provide inferior 
accommodations and service. 

Labor Force 

Lithuania had an estimated labor force of 1.9 million in 
1994. Thirty-two percent of workers were employed in industry, 
12 percent in construction, and 18 percent in the agricultural 
sector. Most of the remainder worked in a variety of activities in 
the services sector — 14 percent in science, education, and cul- 
ture; 10 percent in trade and government; and 7 percent each 
in health care and in transportation and communications. 

Trade-union activities are specifically provided for in the 
constitution and are protected by legislation. The Joint Repre- 
sentation of Lithuanian Independent Trade Unions is an orga- 
nization of twenty-three of the twenty-five trade unions and was 
founded October 22, 1992. Teachers and other government 
workers not involved in law enforcement or security work are 
permitted to join unions. Strikes and other confrontations 
between labor and management have occurred but are limited 
by the nascent free-enterprise system and the perception that 
employment alternatives are limited. Public employees orga- 
nized strikes in 1992. Some Lithuanian trade unions are affili- 



216 



Lithuania 



ated with international trade organizations, and organizational 
assistance has been provided by Western countries, especially 
the Nordic countries. Safe employment practices, regulation of 
workplace safety, and protection from reprisal by employers 
against employees who complain about illegal working condi- 
tions are provided for in the constitution. A minimum wage 
must be paid, and child labor is prohibited. 

Transportation and Telecommunications 

Lithuania's transportation system has great potential, and 
transit traffic by rail, road, and ship represents an important 
part of Lithuania's future development (see fig. 14). There 
were about 2,000 kilometers of railroads (1,524-millimeter 
gauge) in 1994, of which 122 kilometers were electrified. 

There were 55,603 kilometers of roads in 1994, of which 
42,209 kilometers were asphalted. The road system is good. 
The country is crossed by a route from Klaipeda to Minsk via 
Kaunas and Vilnius. A new international highway, Via Baltica, 
will stretch from Tallinn to Warsaw via Riga and Kaunas. 

Lithuania has struggled, however, to develop its national air- 
line, Lithuanian Airlines. Although an agreement has been 
reached with American Airlines, it may not be possible to 
restructure the company into a profitable operation because 
there is excess capacity in the region. Lithuanian Airlines had 
one B-737 and sixty-three Soviet-made aircraft in 1993. The 
main international airport is in Vilnius. A second international 
airport was opened at Siauliai in 1993. In addition to Lithua- 
nian Airlines, service is provided by Aeroflot, Austrian Airlines, 
Drakk Air Lines, Hamburg Airlines, LOT (Polish Airlines), 
Lufthansa, Malev, SAS (Scandinavian Airlines), and Swissair. 
Destinations include Amsterdam, London, Paris, Copenhagen, 
Berlin, Frankfurt, and forty-three cities throughout the former 
Soviet Union. 

Klaipeda is the major coastal point, and Kaunas is the major 
inland port. Some 600 kilometers of inland waterways are navi- 
gable year round. Lithuania's merchant fleet consists of forty- 
four ships, totaling about 323,505 deadweight tons, including 
twenty-nine cargo vessel, three railcar carrier vessels, one roll- 
on/ roll-off vessel, and eleven combination vessels. 

Lithuania has begun to modernize its telecommunications 
industry. A law deregulating certain aspects of telecommunica- 
tions went into effect in January 1992. Private investors now 
have the right to offer long-distance service to the public, but 



217 



Estonia, Latvia, and Lithuania: Country Studies 




Figure 14. Transportation System of Lithuania, 1995 



restrictions on the participation of foreign capital have slowed 
this type of activity. Both telecommunications and transporta- 
tion will require large investments to modernize the infrastruc- 
ture and to reform the enterprises. This sector is plagued with 
inefficiencies. Nevertheless, Lithuania's telephone service is 
among the most advanced in the former Soviet republics. 
There were 240 telephone lines serving 1,000 persons in the 
early 1990s. International connections exist via satellite from 
Vilnius through Oslo or from Kaunas through Copenhagen. 

Lithuania has two television companies and five radio com- 
panies. In 1993 some 1.4 million television sets and more than 



218 



Lithuania 



1.4 million radios were in use, or one per 2.7 persons. Two 
national radio programs are broadcast by the state-owned 
Leituvos Radijas ir Televizija. Radio Vilnius broadcasts in 
Lithuanian and English. There are national, regional, and 
minority language television programs. 

Foreign Economic Relations 

Foreign Trade 

Because of its small domestic market, Lithuania is depen- 
dent on trade to ensure its prosperity. It has made impressive 
progress since the late 1980s. Imports declined from 61 per- 
cent of GDP in 1980 to 23 percent in 1991. Most significant, 
trade was shifted to Western Europe from the former Soviet 
Union. In 1993 three-quarters of Lithuanian exports went to 
the other Baltic states and the other former Soviet republics. 
But this percentage is projected to drop dramatically so that 
most exports will be to the rest of the world by 1996. In the first 
half of 1994, the countries of the former Soviet Union 
accounted for about 53 percent of Lithuania's trade, and West 
European markets made up about 47 percent of Lithuania's 
trade (see table 28, Appendix). In previous years, trade with 
Western markets had made up only about 10 percent of trade. 

According to 1994 estimates, exports totaled approximately 
US$1 billion, up from US$805,014 in 1992, and imports 
amounted to nearly US$1.3 billion, up from US$805,776 (see 
table 29; table 30, Appendix). Lithuania had an overall nega- 
tive trade balance of US$267 million in 1994, according to IMF 
estimates. An estimated surplus of US$63 million in the ser- 
vices account and a deficit of US$192 million in the current 
account resulted in a negative balance of payments overall. 

When the Soviet Union imposed an economic blockade on 
Lithuania in April 1990, many enterprises nimbly shifted pro- 
duction away from goods required under central planning (for 
example, computers for the defense industry) to consumer 
goods. These transformations demonstrated the flexibility of 
many enterprises under difficult circumstances and set the 
stage for economic growth and prosperity. 

Tariffs are imposed on a wide range of imported goods, but 
they are scheduled to be reduced gradually until 2001, when 
Lithuania's free-trade regime will be fully implemented. The 
lowest tariff schedule applies to countries with which Lithuania 
has most-favored-nation status. These countries, about twenty 



219 



Estonia, Latvia, and Lithuania: Country Studies 

in number, include the United States, Canada, Russia, Belarus, 
Ukraine, and Australia. A slightly higher tariff schedule applies 
to goods imported from about twenty countries with which 
Lithuania has a free-trade agreement, such as Estonia, Latvia 
and the members of the EU. These tariffs are scheduled to be 
reduced during the six years following 1995 and will be abol- 
ished for industrial products at the end of that time. The tariffs 
on food products imported from the EU are scheduled to be 
substantially reduced except for sugar, butter, and oil and for a 
limited number of other items. 

Imports consist primarily of natural gas, oil, coal, machinery, 
chemicals, and light industrial products. Oil and natural gas 
are imported from Russia, natural gas is imported from 
Ukraine, and cotton and wool are imported from the Central 
Asian republics of the former Soviet Union. Lithuania exports 
primarily machinery, light industrial products, electronics, 
food products, and textiles. 

On July 18, 1994, Lithuania signed a free-trade agreement 
with the EU that went into effect at the beginning of 1995. It 
calls for a six-year transition period during which trade barriers 
will be dismantled. The agreement grants Lithuania tariff 
exemptions on industrial goods, textiles, and agricultural prod- 
ucts. Full membership in the EU is a primary goal of Lithua- 
nian economic policy. 

Foreign Debt 

Lithuania did not acknowledge responsibility for any debts 
of the Soviet Union. The international community supported 
its contention that it should not be responsible for debts 
incurred while it was "occupied." International financial insti- 
tutions, especially the IMF and the World Bank (see Glossary), 
issued credits to Lithuania after independence. Lithuania's 
total debt, which was about US$38 million at the beginning of 
1993, mushroomed to US$500 million by the end of 1994. 
Increases in the debt to US$918 million by the end of 1996 are 
projected. As a percentage of GDP, the debt will rise from 3.6 
percent to 10.6 percent by 1997. However, repayment terms are 
manageable, and the proceeds of these credits fund needed 
and productive investments. The large inflow of foreign credits 
and investments is responsible for maintaining living standards 
at an acceptable level in the wake of a steep decline in produc- 
tion in 1992 and 1993 and negative trade balances. 



220 



Dock facilities at harbor of Klaipeda 
Courtesy Jonas Tamulaitis 
Department store in pedestrian mall in Siauliai 
Courtesy Victor Visockis 



221 



Estonia, Latvia, and Lithuania: Country Studies 

Foreign Investment 

The largest foreign investor is the United States tobacco and 
food services company Philip Morris, which purchased the 
state tobacco company in Klaipeda for US$25 million in 1993. 
Foreign investment was critical in maintaining public support 
for economic reform during the first years after independence 
and resulted in an influx of hard currency (from foreign assis- 
tance, loans, and investment) and increased activity by the pri- 
vate sector. Most foreign investment came from Britain, 
Germany, the United States, Russia, Poland, and Austria (see 
table 31, Appendix). Total foreign capital invested in the coun- 
try was estimated to be 551 million litai in November 1994. 
About three-quarters of the foreign investors were involved in 
joint ventures. 

Lithuania's Law on Foreign Investments, introduced in 1990 
and amended in 1992, guarantees the unrestricted repatriation 
of all after-tax profits and reinvested capital. A new draft of this 
law places restrictions only on foreign investment in sensitive 
industries, such as defense and energy. Foreign investors 
receive generous profit tax rebates of up to 70 percent. A draft 
amendment to the constitution would lift the prohibition on 
landownership by foreigners. Nevertheless, in part because of 
the growth of organized crime, Lithuania's ability to attract 
more foreign investment has been impaired. Neste, the Finnish 
oil company that operates twelve gas stations in Lithuania, 
halted future investment after an attack, presumably carried 
out by organized crime, on a company representative in 
Klaipeda in October 1994. 

Lithuania in 1994 received a number of foreign loans, 
including ECU 10 million (for value of the European currency 
unit — see Glossary) over fifteen years from the European 
Investment Bank (EIB) for reconstruction of the airport in 
Vilnius and an ECU14 million loan from the EIB for recon- 
struction of the port of Klaipeda. Other foreign loans included 
a US$25 million agricultural sector loan from the World Bank, 
and loans of ECU22 million and ECU9 million from the Euro- 
pean Bank for Reconstruction and Development (EBRD) and 
Japan's Export-Import Bank, respectively, for the moderniza- 
tion of the country's telecommunications system. The EBRD 
also disbursed US$6 million in 1993 as part of an ECU36 mil- 
lion energy infrastructure loan. By February 1994, the World 
Bank had disbursed US$45 million of a US$60 million import 
rehabilitation loan approved in 1992. Lithuania obtained an 



222 



Lithuania 



ECU33 million loan in 1994 from the EBRD to improve safety 
at the Ignalina nuclear power plant and a seventeen-year 
US$26.4 million loan to refurbish its coal- and oil-fired power 
plant. 

Reform Yields Results 

Lithuania experienced initial difficulties with economic 
reform, especially with reform of agriculture, because of the 
government's insistence that social welfare levels be retained 
and that privatization of enterprises would be subject to regula- 
tions forbidding the elimination of jobs and employee services. 
Mistakes in fiscal policies, especially those committed by the 
Bank of Lithuania, and the increase in energy and other prices 
by Russia, as well as difficulties with payments for goods 
exported from Lithuania, also fueled inflation, promoted a 
black market, and emptied the stores. Production decreased. 
In 1993 industrial production dropped more than 50 percent 
compared with 1991. Agricultural production declined by 39 
percent. Unemployment, including partial unemployment, 
rose from 9,000 to more than 200,000. By the end of 1992, the 
lack of heat and shortages of hot water in wintertime were con- 
spicuous evidence of a deep economic crisis in the land. 

Nevertheless, the economic decline was considered to be of 
a temporary nature, caused by the difficulties of the transi- 
tion — common to former Soviet states — to a free-market econ- 
omy. The IMF and the World Bank were satisfied with priva- 
tization and reform efforts, and the latter provided a develop- 
ment loan of US$82 million. On a scale of zero to ten, Ger- 
many's Deutsche Bank in 1991 ranked Lithuania's potential for 
agricultural production as ten and for industrialization as 
approximately eight. Promising sectors for future profitable 
investment include building materials, electricity, transporta- 
tion, and tourism. 

Government and Politics 

Lithuania is an independent democratic republic. Its new 
constitution is that of a presidential democracy with separation 
of powers and a system of checks and balances. In some ways, 
the institutional structure of the government is similar to that 
of the United States; however, it is closer to the system former 
French president Charles de Gaulle gave to the Fifth Republic 



223 



Estonia, Latvia, and Lithuania: Country Studies 

of France — a strong presidency leading a parliament divided 
into many factions. 

The Constitutional System 

On the same day that Lithuania declared independence on 
March 11, 1990, its parliament adopted a provisional constitu- 
tion, called the "provisional basic law," which established a 
framework for the new state's government. The constitution 
comprehensively listed guarantees of democratic rights and 
rules of democratic process, but basic elements of the Soviet- 
style government were maintained. Thus, legislative and execu- 
tive functions were combined under the leadership of parlia- 
ment, and the court system was kept totally dependent on 
legislative definitions and appointments. The legislature's 
name — Supreme Soviet — also was maintained. Its presidium 
became the foremost leadership body, and the chairman of the 
presidium became the chief of parliament, of state, and, in 
effect, of the executive. The provisional basic law, too, was 
made relatively easy to change. 

Despite its democratization, the Soviet model quickly proved 
that it was not suitable for a new, substantively democratic sys- 
tem of government. It took two years of conflict and frustra- 
tion, however, before contending parties agreed to a compro- 
mise between a parliamentary system of legislative superiority 
with a figurehead president and a very strong presidential sys- 
tem in which the legislature would be at best coequal with the 
president. 

The constitution was approved by the voters in a referendum 
on October 25, 1992. Seventy-five percent of those voting 
favored the document. Thus, it was adopted by a solid majority, 
although the percentage of voters participating in the referen- 
dum was smaller (57 percent) than had been the case in most 
elections until then. 

The constitution of 1992 reflects the institutions and experi- 
ences of the United States, France, and Germany as integrated 
into Lithuanian tradition. It also incorporates guarantees of a 
social safety network inherited from the Soviet Union. In its 
introductory provisions, the document not only places a high 
value on democracy but also asserts the right of defense against 
attempts by force to encroach upon or overthrow "state inde- 
pendence, territorial integrity, or the constitutional system" 
(Article 3). It also disallows division of Lithuanian territory 
into any "statelike structures" — an obvious reference to territo- 



224 



Lithuania 



rial autonomy as a solution to ethnic minority problems in the 
country. Furthermore, the status of Lithuania as an "indepen- 
dent democratic republic" can be changed only by a referen- 
dum and only if three-fourths of Lithuanian citizens approve it. 
Similarly, the first seventeen articles (which define the charac- 
teristics of the state, citizenship, state language, and symbols) 
and Articles 147, 148, and 149 (which determine the methods 
for constitutional changes or amendments) can be altered only 
by a referendum. Article 150 of the constitution forbids Lithua- 
nia from joining the Commonwealth of Independent States 
(CIS — see Glossary). Finally, the constitution incorporates the 
declaration of independence of March 11, 1990. 

Fundamental human rights and democratic values, includ- 
ing freedom of "thought, faith, and conscience," are enshrined 
in the constitution, which also guarantees the status of legal 
person to religious denominations and allows religious teach- 
ing in public schools. In addition to personal, political, and 
religious rights, the constitution secures social rights. As al- 
ready noted, these include free medical care, old-age pensions, 
unemployment compensation, and support for families and 
children. 

The power to govern is divided between the legislative and 
executive branches, with an independent judiciary acting as 
interpreter of the constitution and of the branches' jurisdic- 
tions, as well as arbiter of conflicts between them. The constitu- 
tion clearly acknowledges the danger of concentration of 
power in a single person or institution. The legislature has 
regained its old name, Seimas, which was used in the interwar 
years. The executive consists of a president and a prime minis- 
ter with a cabinet, known as the Council of Ministers. The judi- 
ciary is composed of the Supreme Court and subordinate 
courts (the Court of Appeals, district courts, and local courts), 
as well as the Constitutional Court, which decides on the con- 
stitutionality of acts of the Seimas, the president, and the gov- 
ernment.The Office of the Procurator General is an autono- 
mous institution of the judiciary. Creation of special courts, 
such as administrative or family courts, is allowed, although 
establishing courts with "special powers" is forbidden in peace- 
time. 

The parliament consists of 141 members, seventy elected 
from party lists on the basis of proportional representation and 
seventy-one from single-member districts. To be seated in the 
Seimas on the basis of proportional representation, a party 



225 



Estonia, Latvia, and Lithuania: Country Studies 

must receive at least 4 percent of the votes cast. An exception is 
made for ethnic minority groups, however, which do not need 
to pass the 4 percent threshold. The legislature is elected for 
four years. Candidates for the legislature must be at least 
twenty-five years old. Members of the Seimas may serve as 
prime minister or cabinet member, but they may not hold any 
other position in either central or local government or in pri- 
vate enterprises or organizations. The parliament must 
approve the prime minister, as well as his or her government 
and program. It also may force the government's resignation by 
rejecting twice in sequence its program or by expressing no 
confidence by a majority of legislators in secret ballot. 

The powers of the legislature are checked by a number of 
devices: first, by certain constitutional limitations; second, by 
the president as defined under the constitution; and third, by 
the Constitutional Court. Articles 64, 131, and 132 of the con- 
stitution circumscribe the ability of the Seimas to control the 
government, especially the budget. Article 64 specifies the 
times of parliamentary sessions. Although extension is possible, 
ordinarily the legislature cannot sit longer than seven months 
and three days, divided into two sessions. The budget submit- 
ted by the government can be increased by the legislature only 
if the latter indicates the sources of financing for additional 
expenditures. If the budget is not approved before the start of 
the budget year, proposed expenditures cannot be higher than 
those of the previous year. Finally the legislature is not 
entrusted with making decisions concerning the basic charac- 
teristics of Lithuanian statehood and democracy. These are left 
to the citizens by means of referendum. Similarly, the initiative 
for making laws is not limited to the legislature but also 
belongs to the citizens, who can force the legislature to con- 
sider a law by submitting a petition with 50,000 signatures. 

The powers of the legislature are further checked by those of 
the president, who may veto legislation, both ordinary and con- 
stitutional, passed by the legislature. Normally, laws are not 
promulgated without the signature of the president. A presi- 
dential veto can be overridden, but only by an absolute major- 
ity of the Seimas membership. The president can also dissolve 
the parliament if it refuses to approve the government's budget 
within sixty days or if it directly votes no confidence in the gov- 
ernment. However, the next elected parliament may retaliate 
by calling for an earlier presidential election. 



226 



Lithuania 



The president is elected directly by the people for a term of 
five years and a maximum of two consecutive terms. The presi- 
dent is not, strictly speaking, the chief of the executive branch 
or the chief administrator. The Lithuanians borrowed the 
French model of the presidency, then adapted it to their needs. 
Candidates must be at least forty years old. To be elected in the 
first round, 50 percent of the voters must participate and a can- 
didate must receive more than half of the total votes cast. If 50 
percent of the voters do not participate, a plurality wins the 
presidency unless it constitutes less than one-third of the total 
vote. If the first round does not produce a president, a second 
round is held within two weeks between the two top candidates. 
A plurality vote is sufficient to win. 

The president is the head of state. The president also selects 
the prime minister (with the approval of the Seimas), approves 
ministerial candidates, and appoints the commander in chief 
of the armed forces — with legislative confirmation. The presi- 
dent resolves basic foreign policy issues and can confer military 
and diplomatic ranks, appoint diplomats without legislative 
approval, and issue decrees subject to the legislature's right to 
later overturn a decree by legislative action. 

Finally, the president has considerable powers to influence 
the judicial branch. The president has the right to nominate 
(and the Seimas to approve the nomination of) three justices 
to the Constitutional Court and all justices to the Supreme 
Court. The president also appoints, with legislative approval, 
judges of the Court of Appeals. However, legislative confirma- 
tion is not required for the appointment or transfer of judges 
in local, district, and special courts. 

The Constitutional Court checks both the legislative and the 
executive branches of government by ruling on whether their 
legislation and/or actions are constitutional. The court con- 
sists of nine justices appointed by the legislature, three each 
from the nominees of the president, the parliamentary chair- 
man, and the chief justice of the Supreme Court. The presi- 
dent nominates the chief justice of the Constitutional Court. 
Cases for consideration by the Constitutional Court, however, 
may be brought only by one-fifth of the membership of the Sei- 
mas, the ordinary courts, or the president of the republic. 

Politics 

The new system of government became operative with the 
election of President Algirdas Brazauskas in February 1993. 



i 



227 



Estonia, Latvia, and Lithuania: Country Studies 

Brazauskas came from the Lithuanian Democratic Labor Party 
(LDLP), successor to the Communist Party of Lithuania. The 
Brazauskas government surprised many of its critics during 
1994 by its continued commitment to rapid economic reform 
and to Lithuania's independence. Rural interests, which 
formed the bedrock of support for the LDLP, were unhappy 
with the failure to roll back implementation of the free market 
in agriculture and with the breakup of centralized state farms 
and cooperatives. 

Since the declaration of independence, Lithuanian politics 
have been stormy, especially the struggle between the former 
Communist Party of Lithuania and the movement for indepen- 
dence, Sajudis. On its own, the Communist Party of Lithuania 
had won only twenty-three seats out of the 141 seats in the 
March 1990 parliamentary elections. Sajudis and other politi- 
cal parties that supported independence had won a majority. 
In addition, the Lithuanian Social Democratic Party (LSDP) 
won nine seats; the Christian Democratic Party of Lithuania 
(CDPL), two; the Lithuanian Democratic Party (LDP), two; 
and the Lithuanian Green Party, four. Noncommunist parties 
were in their infancy — small and weak. Seventy members of 
parliament did not belong formally to any party, although vir- 
tually all of them were ideologically close to Sajudis. 

Parliamentary organization was complicated by the numer- 
ous parliamentary factions, unrelated to party strength or dif- 
ferentiation in society. Parliamentary factions had no fixed 
constituencies to which they were accountable. In 1992 there 
were nine parliamentary factions and a nonfaction group con- 
sisting of twenty independent deputies. The largest was the 
Center faction (eighteen members), followed by the Moderates 
(sixteen), the LDLP (twelve), the Liberals (ten), the Poles 
(eight), and the Nationalists (nine). The United Sajudis fac- 
tion had sixteen members, and the Santara faction of Sajudis 
had ten. 

The weakness of the LDLP was deceptive. This group had 
lost adherents in the parliament, but in April 1990, while still 
known as the Communist Party of Lithuania, it won approxi- 
mately 40 percent of the votes — and offices — in local elections. 
It was strong in small towns and rural areas. Later in 1990, 
these reformist communists adopted a new name and an essen- 
tially social democratic program, gaining a new lease on politi- 
cal life. 



228 



Sajudis headquarters in winter, Vilnius 
Courtesy Stanley Bach 

In this political landscape, the position of chairman of the 
presidium of the Supreme Soviet (de facto president) was won 
in May 1990 by Vytautas Landsbergis, the president of Sajudis 
and a professor of musicology who had never been a member 
of the Communist Party of Lithuania. Landsbergis defeated the 
former leader, Brazauskas, by two-thirds of the vote. Brazauskas 
refused to accept the position of deputy chairman. Kazimiera 
Prunskiene, an economist, was chosen as prime minister, 
whereupon she immediately quit the Communist Party of 
Lithuania. Brazauskas agreed to serve as one of the deputy 
prime ministers. The other deputy prime minister was Romual- 
das Ozolas, a philosopher and former communist who eventu- 
allyjoined the Center faction in the parliament. 

Soon, however, a conflict developed between Landsbergis 
and Prunskiene, primarily over Lithuania's response to the 
1990 Soviet blockade. Landsbergis stood firm and defiant. 



229 



Estonia, Latvia, and Lithuania: Country Studies 

Prunskiene, after visiting Western leaders, pursued compro- 
mise with the Soviet Union, as suggested by these leaders. In 
early 1991, Prunskiene took the first radical steps in economic 
reform, but the Sajudis forces used that action to unseat her. A 
fellow economist, Albertas Simenas, was chosen as her succes- 
sor, but he temporarily disappeared during the turmoil created 
by the Soviet army, which staged a putsch against the Lithua- 
nian government and on January 13, 1991, massacred un- 
armed civilians. Landsbergis summoned the people to defend 
the parliament. His heroic determination and leadership won 
him further domestic recognition as a national leader and a 
favorable international reputation abroad. For a moment, all 
political groups united against Soviet aggression. Lithuanians 
refused to participate in Gorbachev's referendum on the con- 
tinuation of a federal union and instead held their own 
"national poll," which confirmed overwhelming support for 
independence. However, unity did not last long. 

In Simenas's absence, Gediminas Vagnorius became prime 
minister. He initiated economic reforms and continued the 
political struggle against Brazauskas's party that Landsbergis 
had begun in the spring of 1990. Vagnorius's efforts frequently 
were frustrated by the parliament, and the LDLP formally 
declared opposition to the government in the fall of 1991. 
Reform measures, especially in agriculture, were not successful. 
His struggle with the leadership of the Bank of Lithuania over 
the introduction of a Lithuanian currency, the litas, was unsuc- 
cessful because neither the bank nor a majority in parliament 
supported his program. 

In the meantime, the strength of the Sajudis group and of 
the coalition in parliament that supported Vagnorius was with- 
ering. The leadership of the independence movement, further- 
more, was gradually shifting to more conservative nationalist 
positions after the third conference of the movement in 
December 1991. Anticommunist activities were facilitated by 
access to KGB archives, and past collaboration with the KGB 
was made a political issue. The atmosphere was not improved 
by the ultimately unsuccessful attempts by Sajudis to pass a law 
that would temporarily bar from public office certain catego- 
ries of former officeholders in the communist party power 
structure. The attempt sharpened confrontation between the 
nationalist and former communist party forces. Landsbergis 
sought to strengthen the powers of the executive branch and 



230 



Lithuania 



his own position by establishing an executive presidency. But 
on May 23, 1992, his proposal failed in a referendum. 

After several attempts in parliament to remove the unpopu- 
lar prime minister in the summer of 1992, Vagnorius had to 
resign in July, and new parliamentary elections were agreed 
upon for October. Aleksandras Abisala, another Sajudis leader, 
took over from Vagnorius with the acquiescence of the opposi- 
tion. However, neither his attempts to correct the economic sit- 
uation nor his conciliatory politics improved Sajudis's chances 
in the upcoming elections of October 25, 1992. 

Seventeen groups or coalitions ran candidates for the 141 
seats of the new parliament, the Seimas, but some did not mus- 
ter enough votes for the 4 percent threshold. Against every- 
one's expectations — and even to Brazauskas's own surprise — 
the LDLP and its satellites won an absolute majority of seventy- 
three seats (51 percent). Landsbergis's forces still hoped for a 
strong showing of their coalition, but the Sajudis-Santara coali- 
tion succeeded in winning only sixteen seats, including three 
contested ones. The Social Democratic representation de- 
creased to eight seats, the Christian Democrats increased to 
ten, and the Center barely squeaked through with two victories 
in single-member districts but did not meet the 4 percent 
threshold for seats elected by party lists. Three new groups 
entered the parliament — the Citizens Charter with ten seats; 
Political Prisoners and Exiles with twelve; and the Christian 
Democratic Association, a splinter of the Christian Democratic 
Party with one. One seat was won by an independent. The Pol- 
ish minority, however, was able to win four seats because it was 
not required to reach the 4 percent threshold. 

The significance of the parliamentary elections result was 
threefold: the nationalist forces of Landsbergis were crushed, 
the postcommunist politicians led by Brazauskas made an 
amazing comeback, and the political center in the parliament 
was destroyed. Neither the Center nor the Liberal faction met 
the 4 percent threshold for seats elected by party lists. Political 
polarization of the country was confirmed: there was a strong 
and well-organized left, and there was a weak, shattered, and 
splintered right. 

The polarization was even more conspicuously demon- 
strated in the direct presidential election of February 14, 1993. 
The Lithuanian ambassador to the United States, Stasys Lozo- 
raitis, lost to Brazauskas, who won majorities everywhere except 
in the urban district of Kaunas. The final vote was 61.1 percent 



231 



Estonia, Latvia, and Lithuania: Country Studies 

for Brazauskas and 38.2 percent for Lozoraitis. Brazauskas was 
catapulted to office by the rural population. His majority was 
increased by the vote from urban districts with Polish or Rus- 
sian majorities. Brazauskas won for the same reasons his party 
earlier captured the majority in the parliament: economic cri- 
sis, disappointment with Sajudis, dislike of the once very popu- 
lar Landsbergis, and, most of all, the electorate's trust in 
Brazauskas as a well-known and popular candidate whose cam- 
paign succeeded in portraying the ambassador as a "foreigner" 
ignorant of Lithuania's concerns. 

The Western press saw the election as a victory for former 
communist party members who would stop reform and return 
Lithuania to some sort of association with the former Soviet 
Union. However, the LDLP was no longer communist, and, 
although sympathetic to Russia, it was committed to Lithuania's 
independence. The new president stated repeatedly that he 
would preserve Lithuania's independence, although Landsber- 
gis, now in the role of opposition leader, continued to warn of 
threats to Lithuania's status as an independent state. Brazaus- 
kas resigned as leader of the LDLP, as required by the constitu- 
tion. 

Shortly after the election, President Brazauskas appointed 
Raimundas Rajeckas, a distinguished economist with an aca- 
demic background, as his special counsel. Rajeckas had been 
associated with Harvard and other Western universities and 
had served as Brazauskas's campaign manager. He functioned 
as a "deputy president." Brazauskas also accepted the resigna- 
tion of Prime Minister Bronislovas Lubys and chose as his suc- 
cessor an economist, Adolfas Slezevicius, president of a private 
joint Lithuanian-Norwegian company and former deputy min- 
ister of agriculture for dairy and meat production. Slezevicius 
continued to implement Lithuania's political and economic 
reforms while pursuing an improved relationship with Russia. 

Mass Media 

The collapse of the communist system brought about the 
privatization of most publishing. Although the government still 
plays a role in book publishing, all newspapers and journals are 
privately owned, usually by limited stock companies or by pri- 
vate individuals. The number of periodicals has increased dra- 
matically, and competition is intense. There are several main 
dailies. Lietuvos aidas was first published by the Landsbergis 
government but is now private, although editorially it supports 



232 



Lithuania 



Landsbergis and Sajudis. Lietuvos rytas, an independent daily, 
leans slightly to the left and is very conscious of the power and 
responsibility of the press. It is edited by the former editor of 
Komjaunimo tiesa, the largest daily in Lithuania, and has a circu- 
lation of more than 100,000. Tiesa now is the voice of the Dem- 
ocratic Labor Party after previously being published by the 
Communist Party of Lithuania. Respublika, founded and owned 
by a prize-winning journalist and former member of the Soviet 
Union's Congress of People's Deputies, specializes in "investiga- 
tive journalism" and leans to the left. 

In 1990 Lithuanian newspaper circulation and book publish- 
ing suffered a decline because of a shortage of paper, a result 
of the Soviet economic blockade. In 1989 Lithuanian newspa- 
per circulation per 1,000 inhabitants was 1,223 — higher than in 
Latvia (1,032) but lower than in Estonia (1,620). Annual circu- 
lation of magazines and other periodicals was eleven copies per 
inhabitant (compared with twenty-eight in Latvia and twenty- 
six in Estonia). Annual book and booklet publication was six 
copies per inhabitant (compared with six in Latvia and twelve 
in Estonia). 

Library statistics indicate that newly published books and 
current periodicals are accessible to readers in remote rural 
areas. Lithuania had 1,885 libraries in the early 1990s, com- 
pared with 1,318 for Latvia and 629 for Estonia. 

Foreign Relations 

The course of Lithuania's foreign policy in the 1990s has 
been more stable than its domestic politics. This has been dem- 
onstrated by the fact that between March 1990 and November 
1992 it had five prime ministers but only one minister of for- 
eign affairs. Since independence the cornerstone of Lithua- 
nian foreign policy has been integration with European 
security institutions: the Organization for Security and Cooper- 
ation in Europe (OSCE; until January 1995 known as the Con- 
ference on Security and Cooperation in Europe — see Glos- 
sary), the Council of Europe (COE), the European Union 
(EU), the North Atlantic Cooperation Council (NACC), the 
World Trade Organization (WTO), and ultimately, the North 
Atlantic Treaty Organization (NATO). Lithuania is a member 
of the OSCE, the COE, and the NACC and is an associate mem- 
ber of the EU. It hopes eventually to join the EU, the WTO, 
and NATO, and progress was made toward these goals in 1994. 



233 



Estonia, Latvia, and Lithuania: Country Studies 

In the beginning, Lithuania's aims were more fundamental. 
Lithuania's sole foreign policy concern in 1990 was to gain 
international recognition of the restored Lithuanian state. 
However, efforts directed at Gorbachev on the one hand and 
the Western powers on the other hand bore no fruit. Gor- 
bachev could not afford the political cost of recognizing 
Lithuanian independence, nor did he believe in Lithuania's 
right to statehood. The West's attitude, according to Egon 
Bahr, a German foreign policy expert, was "We'll throw you a 
life preserver after you learn how to swim." Gorbachev infor- 
mally agreed not to use force, and the West did not push him 
to permit Lithuanian independence. 

However, after the Vilnius massacre of January 13, 1991, 
which revealed that Gorbachev had authorized attempts to 
overthrow Lithuania's government, Western states broke ranks. 
The first was Iceland, which declared that it recognized Lithua- 
nia's sovereignty. Iceland had extended recognition in 1922 
and had never reneged on it. Next, Denmark expressed its 
commitment to early recognition. Paradoxically, the greatest 
appreciation of Lithuania's needs came from Russia. After 
learning about the Vilnius massacre, Russian president Boris N. 
Yeltsin met with Baltic leaders in Tallinn and expressed solidar- 
ity with Lithuania. This expression gained legal status on July 
29, 1991. On that day, United States President George H.W. 
Bush signed the Strategic Arms Reduction Talks (START) 
treaty with Gorbachev in Moscow, and Yeltsin and Landsbergis 
signed a treaty "on the basis of relations" between the Republic 
of Lithuania and the Russian Soviet Federated Socialist Repub- 
lic. The crucial item of the treaty was Article 1, which stated 
that "The High Contracting Parties recognize one another as 
full-fledged subjects of international law and as sovereign states 
according to their state status as established by the fundamen- 
tal acts adopted by the Republic of Lithuania on 11 March 
1990 and by the Russian Soviet Federated Socialist Republic on 
12 June 1990." Lithuanians hastily ratified the treaty on August 
19, 1991, the same day as a coup was carried out by conserva- 
tive forces in Moscow against Gorbachev. It was not until Janu- 
ary 17, 1992, however, that Russia ratified the agreement. 

After the coup failed, the international community quickly 
recognized the independence of Lithuania and the other Bal- 
tic states. In September 1991, President Bush renewed the 
United States recognition of Lithuania of 1922 and announced 
that an ambassador would be sent to Vilnius. The Soviet Union 



234 



Lithuania 



recognized Lithuania's independence on September 6, 1991. 
On the recommendation of the United States and the Soviet 
Union, Lithuania was admitted to the United Nations (UN) on 
September 16. Then on December 21, the Soviet Union col- 
lapsed as a legal entity, and on December 24 Yeltsin informed 
UN secretary general Javier Perez de Cuellar that the Russian 
Federation had assumed "all rights and obligations of the 
USSR." Thus, Russia still was, for all practical purposes, the 
Soviet Union, only under different leadership. 

Once Lithuania joined the UN, Landsbergis indicated the 
next priorities of Lithuania's foreign policy: to join all accessi- 
ble international organizations, and to legally strengthen the 
status of the new state while working toward the withdrawal of 
Russian troops, regarded by Lithuanians as an occupying force, 
from Lithuania. The Russian military strongly opposed this 
demand, claiming that the troops had no place to go. The com- 
mander of the Baltic Military District believed the troops would 
leave only after several years. Russian foreign minister Andrey 
Kozyrev suggested a "status of forces" agreement to legalize the 
Russian troop presence. In June 1992, the Baltic Council, a 
consultative body of Baltic leaders, appealed to the CSCE, the 
UN, and the Group of Seven (Canada, France, Germany, Italy, 
Japan, Britain, and the United States). The Group of Seven, 
the CSCE, and the UN, as well as NATO, counseled the Rus- 
sians to set a definite withdrawal date. After protracted negotia- 
tions, Russia agreed to withdraw its troops from Lithuania. An 
agreement was signed in Moscow on September 8, 1992, setting 
the deadline for withdrawal at August 31, 1993, a year earlier 
than expected. 

The withdrawal of Russian troops was completed on time, 
opening a new chapter between Russia and Lithuania and 
encouraging closer economic and other relations. When 
Lithuania first declared independence from the Soviet Union 
and tried to negotiate its status with the Gorbachev administra- 
tion, it did not achieve its goals. But after the dissolution of the 
Soviet Union, Moscow and Vilnius tried to put the past behind 
them, even though the Soviet Union had imposed an eco- 
nomic blockade and had used violence to force Lithuania to 
renounce independence. Although diplomatic relations 
between the two countries were established in 1991, Russia did 
not send an ambassador to Lithuania until 1992, and Lithuania 
reciprocated only in March 1993. Relations between Vilnius 
and Moscow were often unsettled by press reports of violations 



235 



Estonia, Latvia, and Lithuania: Country Studies 

of Lithuanian airspace throughout the first half of the 1990s. 
Despite a desire to control air traffic within its borders, Lithua- 
nia has been unable to come to an agreement with Russia to 
regulate air transit. The two countries did, however, sign an 
economic cooperation agreement in November 1993. 

Preoccupied with Russia and with the West, Lithuanian pol- 
icy makers had somewhat neglected Lithuania's other neigh- 
bors, especially Belarus and Ukraine. Nevertheless, trade with 
Belarus expanded, and a border agreement was reached. 
Ukrainian president Leonid Kuchma's administration was sup- 
portive of Lithuanian sovereignty, and the two countries signed 
an economic cooperation agreement in February 1994. Vilnius 
focused on a rapprochement with Poland, which resulted in a 
treaty of cooperation covering various fields, including de- 
fense, and providing even for joint maneuvers of their armed 
forces. The agreement was signed during a visit to Lithuania by 
Polish president Lech Walesa in April 1994 and was ratified by 
Lithuania in October 1994. 

Lithuania seeks closer relations with Scandinavia. The Swed- 
ish king and the Danish queen have visited Lithuania. Close 
economic ties are being developed with Norway and Denmark. 
Denmark cooperates closely with Lithuania in military affairs 
and has agreed to train Lithuanian military units to serve as 
UN peacekeepers in the former Yugoslavia. 

In relations with Western Europe and the United States, 
Lithuania has two main objectives. The first is economic coop- 
eration and attracting Western capital to boost Lithuania's 
economy and to help with the transition to a free market and 
democracy. The second objective is to gain security guarantees 
so that Lithuania and the other Baltic states would not be left 
alone to face any threat from Russia. Vilnius has pursued these 
objectives by demonstrating its respect for Western values and 
by negotiating bilateral trade agreements, tax treaties, and con- 
sular and other agreements with West European countries and 
the United States. 

National Security 

If permanence of policy-making personnel is an indication 
of policy continuity, Lithuania's defense policy in the early 
1990s has been even more consistent than its foreign poliq'. 
Audrius Butkevicius, a young physician, was appointed minister 
of defense in Prunskiene's government in 1990 and served sev- 
eral years under five prime ministers. 



236 



Lithuania 



Lithuania's struggle for independence was a peaceful revolu- 
tion in which violence was not used. Thus, Lithuania's govern- 
ment did not inherit guerrilla forces or special troops, only the 
regular law enforcement agencies that chose to support inde- 
pendence. Following the declaration of independence, how- 
ever, the Sajudis governments paid attention to the develop- 
ment of some defensive capability, and budgetary appropria- 
tions increased until 1993 when they stabilized at 1 percent of 
the budget, or at least 1 percent less than appropriations for 
education and culture and 3 percent less than those for medi- 
cal care and other health services. 

Butkevicius maintained that Lithuanian defense policy has 
the goal of responding to three threats to Lithuania's national 
security. First, Lithuania is highly vulnerable to threats from 
beyond its borders because of its location. Second, Lithuania's 
internal security and the defense of its borders are also chal- 
lenged by instability within the former Soviet Union and by 
authoritarianism and nationalism expressed by certain political 
parties and movements in Russia. Finally, Lithuania's domestic 
peace is threatened by the growing problem of organized 
crime, which destabilizes social institutions and is accompanied 
by smuggling — of drugs, weapons, and aliens — as well as by vio- 
lent crime. These threats are countered in part by participating 
in the activities of the NACC, the OSCE, and the Western Euro- 
pean Union (WEU). Moreover, Lithuania is developing good 
bilateral relations with the other Baltic states and with Poland 
and Belarus, and it is improving its relations with Russia. 
Another important forum in which threats to Lithuania's 
national security can be countered is the Nordic Council (see 
Glossary). Butkevicius has coordinated policies and enhanced 
ties with the Nordic countries, especially with Denmark. 

Lithuania's main defense accomplishments so far have been 
the withdrawal of Russian military forces, the establishment of 
an army, and association with NATO. An agreement signed 
with Russia in September 1992 committed Russia to removing 
its troops by August 31, 1993. Withdrawal was completed on 
time. The Lithuanian army slowly began taking shape in the 
fall of 1991 but was not formally established until November 
19, 1992. 

Lithuania's contacts with NATO have been numerous. Most 
important, Lithuania joined NATO's Partnership for Peace 
program. Reciprocal visits by officials have been supplemented 
by NATO naval unit visits to Klaipeda, Lithuania's only major 



237 



Estonia, Latvia, and Lithuania: Country Studies 

port. An American frigate was among the visitors in 1992. 
Together with Poland, Lithuania has participated in several 
NATO war exercises, the first of which was "Baltops 1993," held 
in June in the Baltic Sea. Baltops continued in subsequent sum- 
mers. 

Lithuania remains especially concerned about the Russian 
presence in the Baltic region, which will be permanently based 
in the exclave of Kaliningrad. Although Russia has said it will 
gradually reduce the numbers of its military forces there, there 
are currently tens of thousands of military personnel in Kalin- 
ingrad Oblast. 

Armed Forces 

The information available on Lithuania's defense establish- 
ment indicates that Lithuania's "security structure" includes 
armed forces run by the Ministry of Defense; a domestic police 
force subordinate to the Ministry of Interior; and a Parliamen- 
tary Defense Service that protects the parliament and the pres- 
ident of the republic. The chief of the Internal Security Agency 
insists that the agency — successor to some of the KGB's func- 
tions — has no security force, although he thinks that there 
ought to be a budget to establish a force to deal with criminal 
and subversive elements. Under Soviet rule, the KGB had its 
own army and also controlled the border guard. 

The president of the republic chairs the State Defense Coun- 
cil, consisting of the prime minister, the speaker of the parlia- 
ment, the minister of defense, and the chief of the armed 
forces. All of those people, except the speaker, are appointed 
by the president; therefore, the State Defense Council is likely 
to be dominated by the president. The council considers and 
coordinates the most important questions of national defense. 
The government, the minister of defense, and the chief of the 
armed forces are responsible to the Seimas for the manage- 
ment and leadership of the armed forces. The minister of 
defense must be a civilian or a retired military officer. 

Total armed forces in 1994 numbered about 8,900, includ- 
ing a 4,300-member army, 350-member navy, 250-member air 
force, and 4,000-member border guard. A coast guard, which is 
modeled on the United States Coast Guard, is being estab- 
lished. There is also a 12,000-member Home Guard force. The 
army's equipment includes fifteen BTR-60 armored personnel 
carriers. The navy has two small Soviet Grisha-III frigates, one 
Swedish and two Soviet patrol craft, and four converted civilian 



238 



Lithuania 



vessels. The air force's equipment includes twenty-four Soviet 
An-2, two Czechoslovak L-410 and four L-39 aircraft, and 
three Soviet Mi-8 helicopters. Germany has donated jeeps and 
uniforms for Lithuania's armed forces. 

The Home Guard is organized on the Scandinavian model 
and protects borders, strategic facilities, and natural resources. 
Lithuania's military structure also includes civil defense forces, 
which provide administrative control of hazardous facilities, 
transportation, and special rescue services. The national secu- 
rity service is part of the Ministry of Interior and is responsible 
for the fight against organized crime. 

The constitution calls for one year of compulsory military 
training or alternative service (for conscientious objectors). 
Conscription for defense forces started in December 1991. 
However, of the 20,000 annually eligible and legally obligated 
young men, only 6,000 were inducted in 1992. This rate is 
expected to continue. Women are not called to duty, and there 
are no plans for them to serve in the military. 

In the opinion of the commander of NATO forces in North- 
ern Europe, Lithuanian troops are well trained by Western 
standards. In the past, Lithuanians trained in France's military 
antiterrorism school, and some Lithuanian officers and non- 
commissioned officers have attended military schools in the 
United States, France, and Denmark. 

Crime and Law Enforcement 

Crime increased dramatically in Lithuania in the 1990s. The 
number of reported crimes per 100,000 inhabitants in 1990 was 
992. This number increased to 1,197 in 1991, to 1,507 in 1992, 
and to 1,612 in 1993. Both violent crimes and crimes against 
property increased substantially over this period. So far, law 
enforcement bodies, such as the Ministry of Interior, have been 
ineffective in combating this problem because information 
about their repressive activities during the Soviet period has 
discouraged public support. The law enforcement bodies have 
difficulty combining respect for the rule of law with aggressive 
intervention against crime, and criminals have expanded their 
activities. 

The Ministry of Interior is responsible, along with local 
police forces, for fighting crime in Lithuania. Retraining, coop- 
eration with foreign and international police forces, and a con- 
centrated effort to rebuild public support have been empha- 
sized to achieve a more effective police force. The Ministry of 



239 



Estonia, Latvia, and Lithuania: Country Studies 

Interior was expected to claim 20 percent of the state budget in 
1995, according to a parliamentary deputy. In August 1994, the 
cabinet decried widespread corruption in the customs service. 
A commodity exchange president claimed later that year that 
70 percent of imports into Lithuania were sold on the black 
market. 

While violent crime continued to increase in 1994, property 
crime decreased. Overall crime dropped 19 percent in the first 
quarter of 1994 compared with the same period in 1993. Pre- 
meditated murder and attempted murder increased about 59 
percent, and theft increased about 83 percent. 

Organized crime is a serious problem in Lithuania. It en- 
gages in violent crime as well as in smuggling aliens, drugs, 
radioactive materials, and weapons. The son of Georgi Deka- 
nidze, head of the notorious Vilnius Brigade, an organized 
crime ring, was to be executed in 1995 for the murder of a jour- 
nalist who had been investigating organized crime. Dekanidze 
reportedly threatened in November 1994 to blow up the 
Ignalina nuclear power plant if his son were executed. 

Penal Code and Prisons 

The Office of the Procurator General is an independent 
institution responsible for enforcing the penal code and ensur- 
ing that detention of criminal suspects is based on reliable evi- 
dence of criminal activity. A magistrate must approve detention 
after seventy-two hours, and the right to counsel is guaranteed 
by law. Shortages of qualified attorneys limit this right in prac- 
tice, however. Capital punishment is still legal but is rarely 
used. 

Prison conditions in Lithuania are primitive, a legacy of the 
Soviet period, but have not been the subject of international 
concern or criticism to the same extent as in Russia and other 
former Soviet republics. Human rights organizations are active 
in the country, and their right to exist and operate is not chal- 
lenged by the government. Lithuania, as part of its accession to 
the Council of Europe, submitted to an intensive investigation 
of its human rights practices and respect for democratic values. 
The UN High Commissioner for Human Rights, Jose Ayala 
Lasso, visited Lithuania in 1994 and stated that human rights 
and democratic values are respected in Lithuania. He sug- 
gested, however, that Vilnius needs to ratify conventions con- 
cerning racial discrimination, torture, and protocols on capital 
punishment, refugees, and persons without citizenship. 



240 



Lithuania 



Outlook 

Lithuania has started down the road of political and eco- 
nomic reform. If the government is able to hold its course, 
improved living standards and personal freedom will result. 
However, there will be significant obstacles on the road ahead. 
The most pressing challenge is to complete economic and 
political reforms in order to join the EU and reap the benefits 
of participating in the unified European market. These 
changes may upset ties between economic groups and political 
elites, particularly in the banking sector. Prime Minister Slezev- 
icius has underscored the sweeping changes necessary in the 
banking sector as part of this process. 

Lithuania's greatest security challenge arises from its often 
difficult relationship with Russia. Russia's large military pres- 
ence in neighboring Kaliningrad is a source of tension because 
these military facilities are resupplied by rail routes that run 
through Lithuania. Russia and Lithuania currently regulate 
this transit through a "temporary" arrangement that was set up 
to expedite the transit of Russian forces withdrawing from Ger- 
many. All Russian military forces are now out of Germany, but 
the temporary arrangement continues until a satisfactory 
agreement can be negotiated. Russian military personnel have 
frequently violated Lithuanian regulations governing transit 
and have occasionally shown a lack of respect for Lithuania's 
status as a truly independent nation. It remains to be seen 
whether Lithuania will be able to balance the challenges posed 
by Russian military transit with its need to maintain good polit- 
ical and economic relations with Russia. 

Economic relations with Russia over the near term will grad- 
ually diminish in importance as Lithuania reorients its goods 
and services toward the European market. But in the long run, 
if Russia respects Lithuania's sovereignty and if Russia contin- 
ues its process of market reform and democratization, eco- 
nomic relations should begin to increase in importance. This 
can only occur if the two nations find stability in their bilateral 
relationship and mutual advantage in joint trade and invest- 
ment. 

* * * 

Among the best sources of information concerning the 
emergence of the Lithuanian state and national identity are 



241 



Estonia, Latvia, and Lithuania: Country Studies 

Alfred E. Senn's Lithuania Awakening and The Emergence of Mod- 
ern Lithuania. Nations and Politics in the Soviet Successor States, 
edited by Ian Bremmer and Ray Taras, includes an excellent 
essay on Lithuania by Richard Krickus. On Lithuania's transi- 
tion to a market economy, the World Bank has published a 
comprehensive study, Lithuania: The Transition to a Market Econ- 
omy, based on extensive field work and statistics from 1991. The 
Economist Intelligence Unit, which published a 1995 Country 
Profile: Lithuania, issues quarterly updates in its Country Report: 
Baltic Republics: Estonia, Latvia, Lithuania. The Lithuanian gov- 
ernment also publishes quarterly statistics that give an in-depth 
look at the transition to a market economy. (For further infor- 
mation and complete citations, see Bibliography.) 



242 



Appendix 



Table 

1 Metric Conversion Coefficients and Factors 

2 Estonia: Total Population and Population by Nationality, 

Selected Years, 1922-89 

3 Estonia: Population of Largest Cities and Percentage Share 

of Estonians, 1934 and 1989 

4 Estonia: Net In-Migration, 1956-90 

5 Estonia: Natural Population Growth by Nationality, 

1982-92 

6 Estonia: Gross Domestic Product, 1989-93 

7 Estonia: Employment Distribution by Sector, 1990 

8 Estonia: Major Trading Partners, 1992 and 1993 

9 Estonia: Foreign Trade by Commodity Share, 1992 

10 Estonia: Foreign Investment Capital in Estonia by Country 

of Origin, April 1993 

11 Estonia: Foreign Loans and Credits to Estonia, 1992 

12 Estonia: Structure of Industrial Production, 1990 and 1992 

13 Estonia: Livestock Products, 1990 and 1992 

14 Estonia: Field Crop Production, 1990 and 1992 

15 Latvia: Population by Ethnic Origin, Selected Years, 1935- 

89 

16 Latvia: Ethnic Composition of Largest Cities and Riga City 

Districts under Latvia's Jurisdiction, 1989 Census 

17 Latvia: Population Distribution by Ethnic Origin and Age- 

Group, 1989 Census 

18 Latvia: Births, Deaths, and Natural Increase by Ethnic 

Origin, Selected Years, 1980-91 

19 Latvia: Transborder Migration, 1961-89 

20 Latvia: Ethnic Minorities by Place of Birth, 1989 

21 Latvia: Religious Baptisms, Weddings, and Funerals by Reli- 

gious Denomination, 1991 

22 Latvia: Knowledge of Latvian Language among Persons of 

Russian Ethnic Origin by Age-Group, 1979 Census 

23 Latvia: Knowledge of Russian Language among Persons of 

Latvian Ethnic Origin by Age-Group, 1979 Census 



243 



Estonia, Latvia, and Lithuania: Country Studies 



24 Latvia: Distribution of Labor Force by Sector, 1990 

25 Latvia: Agricultural Production on Private Farms, Selected 

Years, 1989-93 

26 Latvia: Growth of Private Farms, Selected Years, 1989-93 

27 Lithuania: Production of Selected Industrial Products, 1989 

28 Lithuania: Foreign Trade by Country, January-June 1994 

29 Lithuania: Exports by Selected Product and by Major 

Trading Partner, 1992 and 1993 

30 Lithuania: Imports by Selected Product and by Major 

Trading Partner, 1992 and 1993 

31 Lithuania: Foreign Investment by Country, September 1994 



244 



Appendix 



Table 1. Metric Conversion Coefficients and Factors 



When you know 


Multiply by 


To find 


Millimeters 


0.04 


inches 


Cen timeters 


39 


inches 




3.3 


feet 


Kilometers 


0.62 


miles 




9 47 






0.39 


square miles 




35.3 


cubic feet 




0.26 


gallons 




2.2 


pounds 




0.98 


long tons 




1.1 


short tons 




2,204.0 


pounds 


Degrees Celsius (Centigrade) 


1.8 

and add 32 


degrees Fahrenheit 



Table 2. Estonia: Total Population and Population by Nationality, 
Sekcted Years, 1922-89 
(in percentages) 



Nationality 


1922 


1934 


1959 


1970 


1979 


1989 


Estonian .... 


87.7 


88.2 


74.6 


68.2 


64.7 


61.5 


Russian 


8.2 


8.2 


20.1 


24.7 


27.9 


30.3 


German .... 


1.7 


1.5 


0.1 


0.6 


0.3 


0.2 


Swedish 


0.7 


0.7 


l 








Finnish 






1.4 


1.4 


1.2 


1.1 


Ukrainian . . . 






1.3 


2.1 


2.5 


3.1 


Belorussian. . 






0.9 


1.4 


1.6 


1.7 


Jewish 


0.4 


0.4 


0.4 


0.4 


0.3 


0.3 


Other 


1.3 


1.0 


1.2 


1.2 


1.5 


1.8 


TOTAL 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


Total popula- 
tion 


1,107,059 


1,126,413 


1,196,791 


1,356,000 


1,464,476 


1,565,662 



— means negligible. 



Source: Based on information from Toivo V. Raun, Estonia and the Estonians, Stanford, 
California, 1991, 130; and Marjejoeste, Ulo Kaevats, and Harry Oiglane, eds., 
Eesti A & 6, Tallinn, 1993, 96. 



245 



Estonia, Latvia, and Lithuania: Country Studies 



Table 3. Estonia: Population of Largest Cities and Percentage Share of 
Estonians, 1934 and 1989 







1934 




1989 


City 


Population 


Percentage of 
Estonians 


Population 


Percentage of 
Estonians 


Tallinn 


137,792 


85.6 


478,974 


47.4 


Tartu 


58,876 


87.6 


113,420 


72.3 


Narva 


23,512 


64.8 


81,221 


4.0 




20,334 


90.7 


52,389 


72.4 


Viljandi 


11,788 


93.3 


23,080 


87.1 


Valga 


10,842 


82.3 


17,722 


52.9 


Rakvere 


10,027 


90.9 


19,822 


75.2 


Voru 


5,332 


91.1 


17,496 


85.2 


Haapsalu 


4,649 


88.3 


14,617 


66.4 




4,478 


88.0 


16,166 


92.8 


Tapa 


3,751 


93.7 


10,439 


37.0 


Paide 


3,285 


93.5 


10,849 


86.7 


Paldiski 


851 


94.0 


7,690 


2.4 


Kohtla-Jarve 1 


_2 


2 


77,316 


20.8 



Kohtla-Jarve became a city after World War II. 
— not applicable. 



Source: Based on information from Kulno Kala, "Eesti rahvuslikust koosseeisust parast 
Teist Maailmasoda," Akadeemia [Tartu] , 4, No. 3, 1992, 534. 



Table 4. Estonia: Net In-Migration, 1956-90 



Period Net In-Migration 



1956-60 30,502 

1961-65 40,435 

1966-70 42,493 

1971-75 31,760 

1976-80 28,398 

1981-85 28,136 

1986-90 7,510 



Source: Based on information from Estonia, Eesti Vabariigi Riiklik Statistikaamet, Statis- 
tika Aastaraamat, 1991, Tallinn, 1991, 26. 



246 



Appendix 



Table 5. Estonia: Natural Population Growth by Nationality, 

1982-92 1 



Year 


Estonians 


Other 
Nationalities 


Total 


Percentage Share 
of Estonians 


1982 


638 


4,608 


5,246 


12.4 


1983 


727 


5,246 


5,973 


12.2 


1984 


157 


5,004 


5,161 


3.0 


1985 


-152 


4,439 


4,287 


-3.0 


1986 


1,171 


4,949 


6,120 


19.1 


1987 


1,654 


5,153 


6,807 


24.3 


1988 


1,949 


4,579 


6,528 


29.9 


1989 


2,578 


3,201 


5,779 


44.6 


1990 


1,079 


1,718 


2,797 


38.6 


1991 


-355 


-30 


-385 


-92.2 


1992 


-783 


-1,333 


-2,116 


-37.0 



Natural population growth means number of births minus number of deaths. 



Source: Based on information from Estonia, Eesti Vabariigi Riiklik Statistikaamet, Statis- 
tika Aastaraamat, 1991, Tallinn, 1991, 39. 



Table 6. Estonia: Gross Domestic Product, 1989-93 
(at constant prices and in percentage of real growth) 





1989 


1990 


1991 


1992 


1993 


Value 1 


8,681 


7,977 


7,099 


5,445 


5,320 


Percentage of real growth 


3.3 


-8.1 


-11.9 


-23.3 


-2.3 



In millions of 1990 Russian rubles. 



Source: Based on information from Economist Intelligence Unit, Country Report: Baltic 
Republics: Estonia, Latvia, Lithuania [London], No. 1, 1994, 4. 



247 



Estonia, Latvia, and Lithuania: Country Studies 



Table 7. Estonia: Employment Distribution by Sector, 1990 





J_ 11 1 UH_J VCCj 


Pcrccn t3.^c 


Administration 


17.1 


2.1 


Agriculture 


94.5 


11.9 




4.0 


0.5 




78.8 


9.9 




3.4 


0.4 


t; i . , ■ ) l , „ 


79.8 


10.0 




fi Q 
o.y 


U. 1 


Health and sports 


49.0 


6.2 


Housing and services 


35.4 


4.5 


Industry 


259.2 


32.6 


Science, research, and development 


18.0 


2.3 


Trade and catering 


69.5 


8.7 


Transportation and communications 


68.3 


8.6 


Other 


11.6 


1.5 


TOTAL 2 


795.5 


100.0 



In thousands. 

Figures may not add to totals because of rounding. 



Source: Based on information from World Bank, Estonia: The Transition to a Market Econ- 
omy, Washington, 1993, 265-66. 



248 



Appendix 



Table 8. Estonia: Major Trading Partners, 1 992 and 1 993 
(in percentages) 



Crw intrv 


1992 


Exports 

1993 


1992 


Imports 

1993 


Finland 


21.1 


20.7 


22.6 


27.9 




20 8 


99 fi 


9S A 


1 7 9 


Latvia 


10.6 


8.6 


1.7 


2.3 


Sweden 


7.7 


9.5 


5.9 


8.9 


Ukraine 


6.9 


3.6 


3.2 


n.a. 1 


Netherlands 


5.0 


4.1 


1.8 


3.6 


Germany 


3.9 


8.0 


8.3 


10.7 


Denmark 


2.4 


2.4 


1.7 


2.6 


United States 


1.9 


1.9 


2.4 


2.7 




1.5 


3.7 


3.6 


3.3 


Japan 


n.a. 


n.a. 


2.7 


4.2 


Other 


18.2 


14.9 


17.7 


16.6 



n.a. — not available. 



Source: Based on information from Estonia, Estonian State Statistics Board, 1993 Statis- 
tical Yearbook, Tallinn, 1993, as reported by Baltic News Service, March 27, 
1993; and Saulius Girnius, "The Economies of the Baltic States in 1993," RFE/ 
RL Research Report [Munich] , 3, No. 20, May 20, 1994, 8-9. 



Table 9. Estonia: Foreign Trade by Commodity Share, 1992 



Commodity Share Percentage 



Exports 

Textiles and textile goods 14.0 

Metals and metal products 11.3 

Animals and animal products 1 1.2 

Mineral products 10.9 

Timber and timber products 7.9 

Imports 

Mineral products 27.2 

Machinery and equipment 18.3 

Textiles and textile goods 15.2 

Automobiles and other vehicles 12.7 



Source: Based on information from Estonia, Estonian State Statistics Board, 1993 Statis- 
tical Yearbook, Tallinn, 1993, as reported by Baltic News Service, March 27, 
1993. 



249 



Estonia, Latvia, and Lithuania: Country Studies 



Table 10. Estonia: Foreign Investment Capital in Estonia by Country 
of Origin, April 1993 



Country 


Total Investment 1 


Percentage 




835.4 


37.7 


Finland 


663.7 


30.0 




235.7 


10.6 


United States 


99.2 


4.5 


Netherlands 


76.5 


3.5 


Yugoslavia 2 


60.1 


2.7 




51.8 


2.3 


Other 


191.0 


8.6 


TOTAL 3 


2,213.4 


100.0 



1 In millions of kroons (for value of the kroon — see Glossary) . 

2 Yugoslavia disintegrated in 1991. Two successor republics, Serbia and Montenegro, have asserted the formation of 
a joint independent state, which they call Yugoslavia, but the United States has not formally recognized this entity 
as a state. 

3 Figures may not add to totals because of rounding. 



Source: Based on information from R. Ehrlich and L. Luup, eds., Invest in the Future: 
The Future Is Estonia, Tallinn, 1993, 36. 



Table 11. Estonia: Foreign Loans and Credits to Estonia, 1992 
(in thousands of United States dollars) 



Source Amount Designated Use 



European Union 45,000 Balance of payments support 

Neste (Finland) 20,600 Purchase of fuel 

Japan 20,000 Purchase of specific goods 

Sweden 10,500 Balance of payments support 

United States 10,000 Purchase of grain (export credit) 

Finland Export Fund 8,500 Export credit 

Switzerland 4,200 Balance of payments support 

Norway 3,150 -do- 
Finland 2,100 -do- 
Austria 1,300 -do- 

Statoil (Sweden) 750 Purchase of fuel 

Iceland 25 EBRD membership 1 



1 EBRD — European Bank for Reconstruction and Development. 

Source: Based on information from Estonia, Ministry of Finance, as reported by Baltic 
News Service, November 24, 1993. 



250 



Appendix 



Table 12. Estonia: Structure of Industrial Production, 
1990 and 1992 
(in percentages) 



Sector 1990 1992 





26.3 


17.9 




24.5 


30.4 


Metals and machinery 


17.0 


8.5 


Forestry, timber, pulp, and paper 


9.2 


9.0 




7.7 


9.1 


Energy 


7.1 


14.0 


Other 


8.2 


11.2 



TOTAL 1 10O0 100.0 



1 Figures may not add to totals because of rounding. 

Source: Based on information from World Bank, Estonia: The Transition to a Market Econ- 
omy, Washington, 1993, 314; and R. Ehrlich and L. Luup, eds., Invest in the 
Future: The Future Is Estonia, Tallinn, 1993, 18. 



Table 13. Estonia: Livestock Products, 1990 and 1992 



Product 1990 1992 



Eggs (millions) 


547.1 


456.0 


Meat (thousands of tons slaughter weight) 






Beef 


79.9 


58.7 


Lamb 


3.0 


2.2 


Pork 


114.5 


60.2 


Poultry 


21.6 


10.2 


Other 


0.3 


0.3 




219.3 


131.6 




1,208.0 


919.3 




205.0 


311.0 



Source: Based on information from Estonia, Estonian State Statistics Board, 1993 Sta- 
tistical Yearbook, Tallinn, 1993, 163-64. 



251 



Estonia, Latvia, and Lithuania: Country Studies 



Table 14. Estonia: Field Crop Production, 1990 and 1992 

Crop Area Sown 1 Total Production 2 Average Yield 3 

1990 1992 1990 1992 1990 1992 



Cereals and legumes 
Winter crops 



Rye 


65.9 


59.2 


177.9 


153.4 


27.0 


25.9 


Wheat 


21.2 


26.8 


53.0 


64.8 


25.0 


24.2 


Total winter 
crops 


87.1 


86.0 


230.9 


218.2 


26.5 


25.4 


Summer crops 














Barley 


263.7 


268.2 


599.9 


300.8 


22.7 


11.2 


Legumes 


0.1 . 


0.4 


0.2 


0.4 


13.7 


9.2 


Mixed grains 


8.0 


10.5 


20.7 


10.8 


25.9 


10.3 


Oats 


33.4 


41.7 


93.4 


43.7 


28.0 


10.5 


Wheat 


4.8 


16.7 


12.4 


24.6 


25.8 


14.7 


Total summer 
crops 


310.0 


337.5 


726.6 


380.3 


23.4 


11.3 


Total cereals and 
legumes 


397.1 


423.5 


957.5 


598.5 


24.1 


14.1 


Flax 


2.0 


0.9 


0.4 


0.2 


2.0 


2.0 


Fodder roots 


11.1 


11.8 


534.8 


176.8 


482.0 


150.0 




45.5 


46.3 


618.1 


669.1 


136.0 


145.0 




5.2 


5.1 


86.0 


63.0 


166.0 


124.0 



In thousands of hectares. 

2 In thousands of tons. 

3 In quintals per hectare. 



Source: Based on information from Estonia, Estonian State Statistics Board, 1993 Statis- 
tical Yearbook, Tallinn, 1993, 159-61. 



252 



Appendix 



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253 



Estonia, Latvia, and Lithuania: Country Studies 



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254 



Appendix 



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255 



Estonia, Latvia, and Lithuania: Country Studies 



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256 



Appendix 



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257 



Estonia, Latvia, and Lithuania: Country Studies 



Table 19. Latvia: Trans border Migration, 1961-89 
(in thousands) 

Came to Latvia Left Latvia Net Migration 



Period 


Total 


Average 
per Year 


lotal 


Average 
per Year 


Total 


Average 
per Year 


1961-65 


238.1 


47.6 


159.1 


31.8 


79.0 


15.8 


1966-70 


233.2 


46.6 


166.4 


33.3 


66.8 


13.4 


1971-75 


292.3 


58.5 


232.0 


46.4 


60.3 


12.1 


1976-80 


245.8 


49.2 


203.9 


40.8 


41.9 


8.4 


1981-85 


255.6 


51.1 


213.5 


42.7 


42.1 


8.4 


1986-89 


201.7 


50.4 


160.8 


40.2 


40.9 


10.2 


1986 


54.5 


n.a. 2 


43.3 


n.a. 


11.2 


n.a. 


1987 


56.9 


n.a. 


40.7 


n.a. 


16.2 


n.a. 


1988 


52.3 


n.a. 


41.1 


n.a. 


11.2 


n.a. 


1989 


38.0 


n.a. 


35.7 


n.a. 


2.3 


n.a. 


1961-89 


1,668.4 




1,296.5 




371.9 





Between 1951 and 1955, the total net flow of migrants was only 16,900 (an average of 3,400 per year). Between 
1956 and 1960, it increased to 58,000 (an average of 11,600 per year). The latter period, however, included thou- 
sands of returning deportees. 
2 n.a. — not available. 

Source: Based on information from Latvia, Valsts Statistikas Komiteja, Latvija Skaitbs, 
1989 (Latvia in Figures, 1989), Riga, 1990, 35; and Latvia, Valsts Statistikas 
Komiteja, Latvijas PSR Tautas Saimnieciba 1970, Riga, 1971, 17-18. 



Table 20. Latvia: Ethnic Minorities by Place of Birth, 1989 
(in percentages) 



Ethnic Minority Latvia Russia Belorussia Ukraine Lithuania 



Polish 65.8 3.1 22.3 — 1 — 

Jewish 53.3 12.3 9.9 19.7 — 

Russian 54.8 36.2 2.2 2.4 — 

Lithuanian 36.3 2.2 0.6 — 60.0 

Belorussian 31.3 3.6 62.2 1.1 — 

Ukrainian 19.4 8.5 1.6 65.7 — 



— means negligible. 

Source: Based on information from Latvia, Valsts Statistikas Komiteja, Riga, May 24, 
1991, unpublished document. 



258 



Appendix 



Table 21. Latvia: Religious Baptisms, Weddings, and Funerals by 
Religious Denomination, 1991 

Baptisms Weddings Funerals 

Religious Number Percentage Number Percentage Number Percentage 

Denomination ° ° ° 



Pentecostal 

Baptist. . . . 

Seventh-Day 
Adventist 

Jewish .... 



10,666 

10,661 
6,315 

1,273 
662 
462 

388 



35.1 

35.0 
20.8 

4.2 
2.2 
1.5 

1.3 
n.a 



1,549 

2,651 
468 

33 
37 
20 

5 
35 



32.3 

55.3 
9.8 

0.7 

0.8 
0.4 

0.1 
0.7 



1,439 

4,995 
1,937 

730 
25 
130 

69 
137 



15.2 

52.8 
20.5 

7.7 
0.3 
1.4 

0.7 
1.4 



30,427 



100.0 



4,798 



100.0 



9,462 



100.0 



1 n.a. — not applicable. 

2 Figures may not add to totals because of rounding. 

Source: Based on information from Kristus Dzive [Riga] , No. 5, 1992, 37. 



259 



Estonia, Latvia, and Lithuania: Country Studies 



Table 22. Latvia: Knowledge of Latvian Language among Persons of 
Russian Ethnic Origin by Age-Group, 1979 Census 



Age-Group 


Total in 
Age-Group 


Latvian as 

First 
Language 


Latvian as 

Second 
Language 


Percentage 
Latvian 
Speakers 


0-6 


89,347 


668 


1,702 


2.7 


7-10 


46,562 


455 


4,008 


9.6 


11-15 


54,650 


471 


9,614 


18.5 


16-19 


55,842 


402 


11,167 


20.7 


20-24 


76,650 


575 


16,423 


22.3 


25-29 


75,777 


859 


18,787 


25.9 


30-34 1 


58,527 


732 


16,973 


30.3 


35-39 


53,058 


830 


13,905 


27.8 


40-44 


60,789 


722 


14,458 


25.0 


45-49 


55,547 


584 


11,930 


22.5 


50-54 


58,446 


482 


12,449 


22.1 


55-59 


41,475 


384 


8,931 


22.5 


60-64 


29,289 


239 


5,828 


20.7 


65-69 


26,266 


284 


5,049 


20.3 


70 and over 


39,128 


300 


5,504 


14.8 


Not known 


111 


2 


15 


n.a. 1 


TOTAL 


821,464 


7,989 


156,743 


20.1 



n.a. — not available. 



Source: Based on information from ethnic Latvian data in Latvia, Itogi vsesoyuznoy 
perepisi naseleniya 1979 goda po Latviyskoy SSR, Riga, 1982, 90. Ethnic Russian 
data presented by Peteris Zvidrins at Association for the Advancement of Baltic 
Studies Conference in Seattle, June 1990. 



260 



Appendix 



Table 23. Latvia: Knowledge of Russian Language among Persons of 
Latvian Ethnic Origin by Age-Group, 1979 Census 



Age-Group 


Total in 
Age-Group 


Russian as 

First 
Language 


Russian as 

Second 
Language 


Percentage 
Russian 
Speakers 


0-6 


1 30 922 


4,490 


6,483 


8.4 


7-10 


77 718 


2,764 


19,266 


28.3 


11-15 


92 894 


3,331 


51,425 


58.9 


16-19 


.... 79,086 


2,795 


63,611 


84.0 


20-24 


88,444 


2,534 


76,347 


89.2 


25-29 


78,861 


1,807 


67,775 


88.2 


30-34 


77,813 


1,494 


65,585 


86.2 


35-39 


104,644 


1,717 


86,653 


84.4 


40-44 


95,523 


1,803 


75,434 


80.9 


45-49 


95,441 


1,429 


68,725 


73.5 


50-54 


85,326 


1,385 


53,385 


64.2 


55-59 [ 


64,448 


957 


34,012 


54.3 


60 and over 


272,773 


2,414 


114,830 


43.0 


Not known 


212 


2 


76 


n.a. 1 


TOTAL 


1,344,105 


28,922 


783,607 


60.5 



n.a. — not available. 



Source: Based on information from ethnic Latvian data in Latvia, Itogi vsesoyuznoy 
perepisi naseleniya 1979 goda po Latviyskoy SSR, Riga, 1982, 90. Ethnic Russian 
data presented by Peteris Zvidrins at Association for the Advancement of Baltic 
Studies Conference in Seattle, June 1990. 



Table 24. Latvia: Distribution of Labor Force by Sector, 1 990 
(in percentages) 



Sector Labor Force 



Agriculture, forestry, and fishing 15.5 

Industry 30.3 

Transportation and communications 7.3 

Construction 10.3 

Trade 9.1 

Credit and insurance 0.5 

Service and other branches 1 27.0 

TOTAL 100.0 



Includes mainly housing and personal services, government, health and social security, education, and recre- 
ational and cultural services. 

Source: Based on information from United States, National Technical Information Ser- 
vice, Latvia: An Economic Profile, Washington, August 1992, 5. 



261 



Estonia, Latvia, and Lithuania: Country Studies 



Table 25. Latvia: Agricultural Production on Private Farms, Selected 

Years, 1989-93 



Product 1989 1991 1992 1993 



Cattle 1 15.1 62.5 141.2 144.5 

Pigs 1 7.0 43.0 85.4 97.4 

Sheep 1 6.4 27.6 52.9 41.3 

Cereals and pulses 2 10.8 89.7 206.3 432.7 

Potatoes 2 14.4 77.8 232.3 361.7 

Milk 3 9.5 73.5 177.9 282.2 

Meat 3 2.2 14.1 23.5 45.1 

* In thousands. 

2 In thousands of tons. 

3 Live weight. 



Source: Based on information from International Monetary Fund, Economic Review: 
Latvia, Washington, 1994, 73. 



Table 26. Latvia: Growth of Private Farms, Selected Years, 1989-93 





1989 


1991 


1992 


1993 


Number of private farms 


3,931 


17,538 


52,279 


57,510 


Total area 1 


65.6 


186.2 


872.9 


1,108.4 




12.8 


89.3 


303.2 


414.8 



In thousands of hectares. 



Source: Based on information from International Monetary Fund, Economic Review: 
Latvia, Washington, 1994, 73. 



262 



Appendix 



Table 27. Lithuania: Production of Selected Industrial Products, 1 989 



Product Quantity 



Energy 

Electric power (billions of kilowatt-hours) 29 

Chemicals 

Mineral fertilizers (thousands of tons) 632 

Sulfuric acid (thousands of tons) 512 

Linoleum (thousands of square meters) 1,624 

Machine building, metals, and electronics (thousands) 

Electric motors 7,659 

Metal-cutting lathes 13 

Electric meters 3,612 

Television sets 615 

Tape recorders 186 

Refrigerators 350 

Bicycles 423 

Construction materials 

Bricks (millions) 1,121 

Window glass (thousands of square meters) 4,172 

Food processing 

Meat (industrial production) (thousands of tons) 447 

Butter (thousands of tons) 78 

Cheese (thousands of tons) 27 

Confectionery goods (thousands of tons) 91 

Fish and marine products (tons) 41 

Textiles and soft goods 

Textiles (millions of square meters) 218 

Shoes (millions of pairs) 12 

Knitwear (millions of units) 18 

Estimated. 



Source: Based on information from The Baltic States: A Reference Book, Tallinn, 1991. 



263 



Estonia, Latvia, and Lithuania: Country Studies 



Table 28. Lithuania: Foreign Trade by Country, January-June 1994 

(in percentages) 



Country Exports Imports 



Russia 30 41 

Germany 10 14 

Belarus 7 3 

Ukraine 7 6 

Latvia 7 2 

Poland V.V 1 4 4 



Source: Based on information from Lithuania, Ministry of Foreign Affairs, Department 
of Economic Relations, 1995. 



Table 29. Lithuania: Exports by Selected Product and by Major 
Trading Partner, 1992 and 1 993 
(in thousands of United States dollars) 

Germany 1 France 1 Italy 1 Total 2 

Product 1992 1993 1992 1993 1992 1993 1992 



Food 11,764 26,930 648 1,478 1,733 1,169 164,025 

Chemicals .... 16,418 22,002 7,335 12,836 301 640 74,711 

Machinery.... 1,615 11,440 356 278 909 511 197,006 

Clothing 8,804 35,528 1,243 4,350 133 214 55,804 

Petroleum and 
petroleum 

products.... 13,088 3,091 7,489 29,507 9 25,213 

Other 157,902 94,267 10,975 17,520 11,267 21,897 288,255 

TOTAL 209,591 193,258 28,046 65,969 14,343 24,440 805,014 



Figures from partner countries' trade accounts. 
2 Figures from Lithuania's trade accounts. 

Source: Based on information from Economist Intelligence Unit, Country Report: Baltic 
Republics: Estonia, Latvia, Lithuania [London], No. 1, 1995, 47. 



264 



Appendix 



Table 30. Lithuania: Imports by Selected Product and by Major 
Trading Partner, 1 992 and 1 993 
(in thousands of United States dollars) 



Product 



Germany 



1992 



1993 



United States 1 
1992 1993 



France 1 Total 2 
1992 1993 1992 



Food 63,111 44,069 25,089 17,818 18,739 53,198 80,472 

Chemicals.... 12,387 22,684 98 424 3,274 3,418 70,842 

Machinery... 51,033 116,272 4,679 14,652 798 3,354 119,382 
Clothing and 

footwear... 4,481 12,263 1,599 252 321 993 9,486 

Scientific instru- 
ments 3,080 5,050 758 1,844 49 1,107 n.a. 3 

Other 33,173 102,213 11,887 21,501 2,383 7,932 525,594 

TOTAL 167,265 302,551 44,110 56,491 25,564 70,002 805,776 

1 Figures from partner countries' trade accounts. 

2 Figures from Lithuania's trade accounts. 

3 n.a. — not available. 

Source: Based on information from Economist Intelligence Unit, Country Report: Baltic 
Republics: Estonia, Latvia, Lithuania [London] , No. 1, 1995, 47. 



Table 31. Lithuania: Foreign Investment by Country, September 1994 



Country 



Percentage 1 



Britain 25 

Germany 16 

United States 12 

Russia 7 

Poland 6 

Austria 6 

Other 28 

TOTAL 100 

1 Estimated. 

Source: Based on information from Lithuania, Ministry of Foreign Affairs, Department 
of Economic Relations, 1995. 



265 



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279 



Glossary 



Cheka (Vserossiyskaya chrezvychaynaya komissiya po bor'be s 
kontrrevolyutsiyey i sabotazhem — VChK) — All-Russian 
Extraordinary Commission for Combating Counterrevolu- 
tion and Sabotage. The political police created by the Bol- 
sheviks in 1917, the Cheka (also known as the Vecheka) 
was supposed to be dissolved when the new regime, under 
Vladimir I. Lenin, had defeated its enemies and secured 
power. But the Cheka continued until 1922, becoming the 
leading instrument of terror and oppression in the Soviet 
Union, as well as the predecessor of other secret police 
organizations. Members of successor security organiza- 
tions continued to be referred to as "Chekisty" in the late 
1980s. 

Commonwealth of Independent States (CIS) — A loosely struc- 
tured alliance of most of the former republics of the Soviet 
Union that facilitates consultation and cooperation in eco- 
nomic and security matters of common concern. Members 
in 1995 were Armenia, Azerbaijan, Belarus, Georgia, Ka- 
zakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turk- 
menistan, Ukraine, and Uzbekistan. 

Communist International (Comintern) — An international 
organization of communist parties founded by Russian 
Communist Party (Bolshevik) leader Vladimir I. Lenin in 
1919. Initially, it attempted to control the international 
socialist movement and to foment world revolution; later, 
it also became an instrument of Soviet foreign policy. The 
Comintern was dissolved by Soviet leader Joseph V. Stalin 
in 1943 as a conciliatory measure toward his Western 
allies. 

Conference on Security and Cooperation in Europe (CSCE) — 
Established in 1972, the group in 1995 consisted of fifty- 
three nations — including all the European countries — and 
sponsored joint sessions and consultations on political 
issues vital to European security. The Charter of Paris 
(1990) changed the CSCE from an ad hoc forum to an 
organization having permanent institutions. In 1992 new 
CSCE roles in conflict prevention and management were 
defined, potentially making the CSCE the center of a 
Europe-based collective security system. In the early 1990s, 



281 



Estonia, Latvia, and Lithuania: Country Studies 

however, applications of these instruments to conflicts in 
Yugoslavia and the Caucasus were largely ineffective. In 
January 1995, the organization was renamed the Organiza- 
tion for Security and Cooperation in Europe (OSCE). 

Congress of People's Deputies — Established in December 1988 
in the Soviet Union by constitutional amendment, the 
Congress of People's Deputies was the highest organ 
(upper tier) of legislative and executive authority in the 
Soviet Union. As such, it elected the Supreme Soviet of the 
Soviet Union. The Congress of People's Deputies that was 
elected in March through May 1989 consisted of 2,250 
deputies. The Congress of People's Deputies ceased to 
exist at the demise of the Soviet Union. 

Council of Europe — Founded in 1949, the Council of Europe 
is an organization overseeing intergovernmental coopera- 
tion in designated areas such as environmental planning, 
finance, sports, crime, migration, and legal matters. In 
1995 the council had thirty-five members. 

European Community (EC) — A grouping of primarily eco- 
nomic organizations of West European countries, includ- 
ing the European Economic Community (EEC), the 
European Atomic Energy Community (Euratom or 
EAEC), and the European Coal and Steel Community 
(ECSC). The name changed to European Union (q.v.) in 
November 1993. Members in 1993 were Belgium, Britain, 
Denmark, France, Germany, Greece, Ireland, Italy, Luxem- 
bourg, the Netherlands, Portugal, and Spain. 

European currency unit (ECU) — Established in 1979 as a com- 
posite of the monetary systems of European Community 
(q.v.) member nations, the ECU functions in the Euro- 
pean Monetary System and serves as the unit for 
exchange-rate establishment, credit and intervention 
operations, and settlements between monetary authorities 
of member nations. 

European Union (EU) — Successor organization to the Euro- 
pean Community (q.v.). The EU was officially established 
by ratification of the Maastricht Treaty of November 1993. 
The aim of the EU is to promote the economic integration 
of Europe, leading to a single monetary system and closer 
cooperation in matters of justice and foreign and security 
policies. In 1995 members consisted of Austria, Belgium, 
Britain, Denmark, Finland, France, Germany, Greece, Ire- 
land, Italy, Luxembourg, the Netherlands, Portugal, Spain, 



282 



Glossary 



and Sweden. 

glasnost — Russian term for public discussion of issues; accessi- 
bility of information so that the public can become famil- 
iar with it and discuss it. Glasnost is the name given to 
Soviet leader Mikhail S. Gorbachev's policy in the Soviet 
Union in the mid- to late 1980s of using the media to make 
information available on certain controversial issues to 
provoke public discussion, challenge government and 
party bureaucrats, and mobilize greater support for the 
policy of perestroika (q.v.). 

gross domestic product (GDP) — A measure of the total value of 
goods and services produced by the domestic economy 
during a given period, usually one year. GDP is obtained 
by adding the value contributed by each sector of the 
economy in the form of profits, compensation to employ- 
ees, and depreciation (consumption of capital). Only 
domestic production is included, not income arising from 
investments and possessions owned abroad, hence the use 
of the word "domestic" to distinguish GDP from the gross 
national product (q.v.). Real GDP is the value of GDP 
when inflation has been taken into account. 

gross national product (GNP) — The gross domestic product 
(q.v.) plus the net income or loss stemming from transac- 
tions with foreign countries. GNP is the broadest measure- 
ment of the output of goods and services by an economy. 
It can be calculated at market prices, which include direct 
taxes and subsidies. Because indirect taxes and subsidies 
are only transfer payments, GNP is often calculated at fac- 
tor cost, removing indirect taxes and subsidies. 

International Monetary Fund (IMF) — Established along with 
the World Bank (q.v.) in 1945, the IMF has regulatory sur- 
veillance and financial functions that apply to its more 
than 150 member countries and is responsible for stabiliz- 
ing international exchange rates and payments. Its main 
function is to provide loans to its members (including 
industrialized and developing countries) when they expe- 
rience balance of payments difficulties. These loans often 
have conditions that require substantial internal economic 
adjustments by the recipients, most of which are develop- 
ing countries. Estonia, Latvia, and Lithuania joined the 
IMF and the World Bank in 1992. 

Karaites — Members of a religious group practicing Karaism, a 
Jewish doctrine originating in Baghdad in the eighth cen- 



283 



Estonia, Latvia, and Lithuania: Country Studies 

tury A.D. that rejects rabbinism and talmudism and bases 
its tenets on Scripture alone. 

kroon (EKR) — Estonia's prewar currency (1928-40), reintro- 
duced in June 1992 after Estonia became the first former 
Soviet republic to leave the Russian ruble zone. The kroon 
was officially pegged to the deutsche mark (DM) within 3 
percent of EKR8 = DM1. In March 1996, the exchange rate 
was EKR11.83 = US$1. 

lats (LVL) — Latvia's unit of currency prior to the Soviet annex- 
ation in 1940. Reintroduced in March 1993, the lats 
became the sole legal tender in Latvia in October 1993. In 
March 1996, the exchange rate was LVL0.55 = US$1. 

Latvian ruble — Interim unit of currency introduced in Latvia 
in May 1992 and circulated in parallel to and valued at par 
with the Russian ruble, a vestige of Soviet rule, until July 
1992. Sole legal tender until March 1993. Replaced by the 
lats (q.v.). 

litas (pi., litai) — Lithuania's unit of currency prior to the Soviet 
annexation in 1940. Reintroduced in June 1993, the litas 
became the sole legal tender in Lithuania in August 1993. 
In March 1996, the exchange rate was 4.0 litai = US$1. 

nomenklatura — The communist party's system of appointing key 
personnel in the government and other important organi- 
zations, based on lists of critical positions and people in 
political favor. The term also refers to the individuals 
included on these lists. 

Nordic Council — Founded in 1952, the Nordic Council pro- 
motes political, economic, cultural, and environmental 
cooperation in the Nordic region. Members in 1995 were 
Denmark, Finland, Iceland, Norway, and Sweden. 

Old Believers — A sect of the Russian Orthodox Church that 
rejects the reforms of liturgical books and practices car- 
ried out by the head of the church, Patriarch Nikon, in the 
mid-seventeenth century. 

perestroika — Literally, restructuring. The term refers to Mikhail 
S. Gorbachev's campaign in the Soviet Union in the mid- 
to late 1980s to revitalize the economy, communist party, 
and society by adjusting political, social, and economic 
mechanisms. 

value-added tax (VAT) — A tax levied on the value-added 
income of a business. The VAT is defined as the difference 
between the total sales revenue and the costs of intermedi- 
ate inputs, such as raw materials, used in the production 



284 



Glossary 



process. 

World Bank — Name used to designate a group of four affiliated 
international institutions that provide advice on long-term 
finance and policy issues to developing countries: the 
International Bank for Reconstruction and Development 
(IBRD), the International Development Association 
(IDA), the International Finance Corporation (IFC), and 
the Multilateral Investment Guarantee Agency (MIGA). 
The IBRD, established in 1945, has the primary purpose of 
providing loans to developing countries for productive 
projects. The IDA, a legally separate loan fund adminis- 
tered by the staff of the IBRD, was set up in 1960 to furnish 
credits to the poorest developing countries on much easier 
terms than those of conventional IBRD loans. The IFC, 
founded in 1956, supplements the activities of the IBRD 
through loans and assistance designed specifically to 
encourage the growth of productive private enterprises in 
less developed countries. The president and certain senior 
officers of the IBRD hold the same positions in the IFC. 
The MIGA, which began operating in June 1988, insures 
private foreign investment in developing countries against 
such noncommercial risks as expropriation, civil strife, 
and inconvertibility. The four institutions are owned by 
the governments of the countries that subscribe their capi- 
tal. To participate in the World Bank group, member states 
must first belong to the International Monetary Fund 
(q.v.). 



285 



Index 



Abisala, Aleksandras, 231 
abortion: in Estonia, 31 
Abrene (Latvia): annexation by Russia, 
104, 158 

Academy of Sciences (Lithuania) , 206 

acquired immune deficiency syndrome 
(AIDS): in Estonia, 32; in Latvia, 120; 
in Lithuania, 195 

Agricultural Bank (Lithuania), 212 

agriculture in Estonia: collectivization, 
20, 56, 58; cooperatives, 60; private 
farming, 16, 58, 60 

agriculture in Latvia, 133-35; collectiv- 
ization, 134-35; cooperatives, 130; 
drainage projects, 108; erosion prob- 
lems, 104; livestock farming, 135; pri- 
vate farming, 105, 115, 135, 146 

agriculture in Lithuania, 213-15; collec- 
tivization, 182, 208, 213-14; private 
farming, 208, 210, 215; production, 
213,215,223 

AIDS. See acquired immune deficiency 
syndrome 

air force. Smarmed forces 

airline industry: in Estonia, 63; in Latvia, 
137; in Lithuania, 217 

air pollution. See environmental pollu- 
tion 

alcoholism: in Latvia, 120-21; in Lithua- 
nia, 195 

Aleksiy (patriarch), xxv, 36 

All-Estonian Congress, 15 

All-Russian Constitutional Assembly 
(Latvia), 95 

Alver, Betti, 37 

Alviekste River (Latvia), 107 

amber: from Latvia, 110; from Lithuania, 
204 

Andrejevs, Georgs, 156 

architecture: in Estonia, 37 

area: of Estonia, 28; of Latvia, 93, 104; of 

Lithuania, 186 
armed forces: of Estonia, xxv, 76-77; of 

Latvia, 159-62; of Lithuania, 238-39 
arts: in Estonia, 38; in Latvia, 129; in 



Lithuania, 202, 204 
Atdzimsana un Atjaunosana. See Rebirth 

and Renewal 
Ayala Lasso, Jose, 240 

Baker, James A: visit to Baltic states, 74 
Baltic Agreement on Economic Cooper- 
ation, 155 
Baltic Battalion, xxviii, 159 
Baltic Council, 73 

Baltic Independent (newspaper), 71, 159 
Baltic Treaty on Unity and Cooperation, 
155 

Baltija Bank (Latvia): collapse of, xxi- 
xxiii 

Bank of Estonia, 40, 41 , 42 

Bank of Latvia, 140, 145-46 

Bank of Lithuania, 211-12, 230 

bank reforms: in Estonia, 40-42; in 
Latvia, xxi; in Lithuania, xxii, xxv, 
211-12 

baptisms: in Latvia, 124-26 

Baptists: in Estonia, 36; in Latvia, 122, 
128; in Lithuania, 200 

Barons, Krisjanis, 129 

Belarus: relations with Latvia, 159; rela- 
tions with Lithuania, 236; trade with 
Lithuania, 236 

Belarusian/Belorussian population: in 
Estonia, 30; in Latvia, 111; in Lithua- 
nia, 191 

Beriozovas, Vladimiras, 185 

Berklavs, Eduards, 101, 107, 131 

Bildt, Carl, 73 

Birkavs, Valdis, 152 

birth control: abortions in Estonia, 31 

birth rate: in Estonia, 30; in Latvia, 113; 
in Lithuania, 189 

births outside of marriage: Latvia, 115 

Black Berets. See Soviet Ministry of Inter- 
nal Affairs, Special Forces Detach- 
ment 

black market: in Estonia, 78 
blockade. See economic blockade 



287 



Estonia, Latvia, and Lithuania: Country Studies 



Bolsheviks, 15-16; in Latvia, 95; in 
Lithuania, 191 

border disputes: between Estonia and 
Russia, xxiv-xxv, 28-29; between 
Latvia and Russia, 104, 158; between 
Lithuania and Germany, 179; between 
Lithuania and Latvia, xxvii 

borders: of Estonia, 28-29, 75; of Latvia, 
104; of Lithuania, 186, 236 

Bosnia peacekeeping operation: Baltic 
participation in, xxviii 

Brazauskas, Algirdas, xxii, xxv-xxvii, 185, 
212-13, 227-32 

Brezhnev, Leonid I., 20, 184 

Britain: military assistance to Baltic Bat- 
talion, xxviii 

budget: of Estonia, 42, 44; of Latvia, 142, 
162; of Lithuania, 211 

Bukharin, Nikolay I., 98 

Bush, George H.W., 74, 155, 234 

bus transportation: in Estonia, 63; in 
Latvia, 135-36 

Butkevicius, Audrius, 236, 237 

Cabinet of Ministers (Latvia), 150, 152 
Calvinists. See Evangelical Reformed 
Church 

capital punishment. See death penalty 
Caritas, 196 

Catherine II (the Great), 15 
Catholics. See Roman Catholics; Uniates 
CBSS. See Council of the Baltic Sea States 
CDPL. See Christian Democratic Party of 

Lithuania 
Charles XII (king of Sweden) , 14 
Cheka, 96 

Chrisostom (archbishop), 200 
Christian Democratic Association 

(Lithuania), 231 
Christian Democratic Party of Lithuania 

(CDPL), 228, 231 
Christian Democratic Union (Latvia), 

152 

The Chronicle of the Catholic Church of 

Lithuania, 183-84 
CIS. See Commonwealth of Independent 

States 

Citizens Charter (Lithuania), 231 
citizenship rights: in Baltic states, xix-xx; 
in Estonia, 65, 67-68, 68, 73, 74; in 
Latvia, 150, 151, 152-53, 156-58, 164; 



in Lithuania, xix, 225 

Ciurlionis, Mikalojus, 204 

climate: of Estonia, 28; of Latvia, 107-8; 
of Lithuania, 187 

Clinton, William J.: relations of adminis- 
tration with Estonia, 74 

Coalition Party (Koonderakond) (Esto- 
nia), 66, 67 

Coalition Party-Rural Union alliance 
(Estonia) , xxiv 

COE. See Council of Europe 

collectivization. See agriculture 

Comintern. See Communist Interna- 
tional 

Committee for State Security (Komitet 
gosudarstvennoy bezopasnosti — 
KGB), 102, 154, 183-84, 230, 238 

Committee for the Defense of Religious 
Rights (Lithuania), 184 

Commonwealth of Independent States 
(CIS) , 225 

Communist International (Comintern), 
17 

communist party of Estonia. See Estonian 

Communist Party 
Communist Party of Latvia (CPL), 101, 

102, 131, 132, 148 
Communist Party of Lithuania, xxii, 119, 

181-85, 228 
Communist Party of the Soviet Union 

(CPSU), 185; Central Committee of 

the, 101 

Conference on Security and Coopera- 
tion in Europe (CSCE) (see also Orga- 
nization for Security and Cooperation 

in Europe): Estonian membership, 67, 

/ 72 

Congress of Estonia, 25 

Congress of People's Deputies (Soviet 
Union), 21,97, 103, 185, 233 

Constitution. Satversme 

constitutional law: in Estonia, 17, 26, 65, 
68-70; in Latvia, 149; in Lithuania, 
194, 201, 223, 224-26 

cost-of-living index: in Estonia, 44 

Council of Europe (COE): Estonian 
membership, xx, 67; human rights 
investigations by, 164, 240; Latvian 
observer status and membership, xx, 
158; Lithuanian membership, xx, 233, 
240 

Council of Ministers (Estonia), 68 



288 



Index 



Council of Ministers (Latvia), 101 
Council of Ministers (Lithuania), 225 
Council of the Baltic Sea States (CBSS), 

72-73, 158-59 
Council of Trustees. SeeVertrauensrat 
counties (maakonnad) (Estonia), 12, 70 
coup d'etat in Moscow (1991), 11, 24, 

102, 103, 186 
Courland Lagoon. S^Kursiu Marios 
court system. S«<?judicial system 
CPL. See Communist Party of Latvia 
CPSU. See Communist Party of the Soviet 

Union 

crime: in Estonia, 78; in Latvia, 120-21, 

162, 164; in Lithuania, 197, 239-40 
CSCE. See Conference on Security and 

Cooperation in Europe 
culture: Estonian, 15, 36-39; Latvian, 

129; Lithuanian, 202, 204-5 
currency: in Estonia, xxi, 26, 39, 41, 42, 

48, 80; in Latvia, 96, 140; in Lithuania, 

206, 210, 230 
The Czar's Madman (Kross) , 38 

dainas (Latvian folksongs), 129 

Dalai Lama: visit to Estonia, 36 

dance: in Lithuania, 204 

Daugava River (Latvia), 106 

death, causes of: in Estonia, 31; in Latvia, 

120; in Lithuania, 195 
death penalty: in Estonia, 78; in Latvia, 

164; in Lithuania, 240 
death rate: in Estonia, 30, 31; in Latvia, 

113, 120; in Lithuania, 189 
Defense League (Kaitseliit) (Estonia), 

xxv, 76 

defense policy. See armed forces; 

national security 
defense spending: in Estonia, 76; in 

Latvia, 162; in Lithuania, 237 
Dekanidze, Georgi, 240 
Democratic Center Party (Latvia), 152 
Democratic Labor Party (Lithuania), 

233 

Democratic Party Saimnieks (Latvia), 
xxiii 

Denmark: invasion of Estonia, 12; mili- 
tary assistance to Baltic Battalion, 
xxviii; military cooperation with Baltic 
states, xxviii; recognition of Lithua- 
nian independence, 234; relations 



with Estonia, 73 
deportations: from Estonia, 19-20, 30; 
from Latvia, 100; from Lithuania, 181, 
182 

diplomatic relations. See foreign rela- 
tions 

divorce rate: in Estonia, 31; in Latvia, 

115; in Lithuania, 190 
drug abuse: in Latvia, 120; in Lithuania, 

195 

Dzerve, Pauls, 131 



EBRD. See European Bank for Recon- 
struction and Development 

economic blockade: of Lithuania by 
Soviet Union, 185, 219, 229 

economic reforms (see also privatiza- 
tion): in Estonia, xx, 11-12, 23, 39-41, 
66-67; in Latvia, 140, 142, 144-47; in 
Lithuania, xxii, xxv-xxvii, 184, 206, 
207-12, 223, 230 

Economist Intelligence Unit, xxi, 142 

education in Estonia: compulsory educa- 
tion, 33; languages in, 33; parish 
schools, 14; school enrollment, 33; 
university level, 14, 34; vocational edu- 
cation, 33-34 

education in Latvia: bilingual schools, 
116; for ethnic groups, 118; higher 
education, 116; military institutes, 
162; rabbinical education, 124; 
Roman Catholic seminary, 126, 128; 
Russian-language schools, 112; school 
enrollment, 118; theological educa- 
tion, 126, 128 

education in Lithuania: higher educa- 
tion, 205; of Jewish community, 192; 
languages in, 205; literacy rate, 205; 
Lithuanian schools, 201; public educa- 
tion, 194; research institutes, 206; 
school enrollment, 205 

EEA. See Estonian Privatization Agency 

EERE. Estonian Privatization Enter- 
prise 

Eesti Erastamisagentuur. See Estonian 

Privatization Agency 
Eesti Erastamisettevote. See Estonian 

Privatization Enterprise 
Eesti Keskerakond. See Estonian Center 

Party 

Eesti Kodanike Liit. See Estonian Citizens 



289 



Estonia, Latvia, and Lithuania: Country Studies 



Union 

Eestimaa Kommunistlik Partei. See Esto- 
nian Communist Party 

Eesti Rahvusliku Soltumatuse Partei. See 
Estonian National Independence 
Party 

EIB. See European Investment Bank 

Einseln, Aleksander, xxv, 75 

EKP. See Estonian Communist Party 

elections: in Estonia (1992), 28, 66; in 
Estonia (1993), 67-68; in Estonia 
(1995), xxiii-xxiv; in Latvia (1990), 
149; in Latvia (1993), 150; in Latvia 
(1995), xxiii; in Lithuania (1992), 
231-32; in Lithuania (1995) , xxii-xxiii 

electric power. See energy resources 

electronics industry: in Lithuania, 213 

Emajogi River (Estonia), 28 

employment: in Estonia, 45-46; in 
Latvia, 115-16; in Lithuania, 216-17 

energy resources: electric power, 213, 
215; in Estonia, 60-61; hydroelectric 
power, 106-7, 133, 153, 213; in Latvia, 
106-7, 133, 153; in Lithuania, 188-89, 
213, 215-16; nuclear power, 188, 213, 
215; oil processing, 215; oil reserves, 
188-89; thermal energy, 189 

energy shortages: in Estonia, 41; in 
Lithuania, 196 

environmental pollution in Estonia: air 
pollution, 29; Soviet toxic chemical 
wastes, 29-30; underground water 
contamination, 29 

environmental pollution in Latvia: of riv- 
ers, 107 

environmental pollution in Lithuania, 
187-88 

environmental protection: in Estonia, 

29-30; in Latvia, 102; in Lithuania, 

184-85, 188 
Environmental Protection Club (EPC) 

(Latvia), 102 
EPC. ^Environmental Protection Club 
Equal Rights Movement. See Ravno- 

praviye 
Ernesaks, Gustav, 38 
Estland, 14, 15 

Estonian Academy of Music, 34 
Estonian Agricultural University, 34 
Estonian Center Party (Eesti Keskera- 

kond) , xxiv, 66 
Estonian Citizens Committees, 21-22 



Estonian Citizens Union (Eesti Kodanike 
Liit), 66 

Estonian Communist Party (Eestimaa 
Kommunistlik Partei— EKP), 17, 18, 
20, 22,37, 40 

Estonian Heritage Society, 38 

Estonian National Independence Party 
(Eesti Rahvusliku Soltumatuse Partei) , 
xxiii, 66, 78 

Estonian Orthodox Church, xxv, 34, 36 

Estonian Popular Front, 20-21, 22, 23 

Estonian population: in Latvia, 110; in 
Lithuania, 191 

Estonian Privatization Agency (Eesti 
Erastamisagentuur — EEA) , 55 

Estonian Privatization Enterprise (Eesti 
Erastamisettevote — EERE), 54-55 

Estonian Reform Party, xxiv 

Estonian Shipping Company, 63 

Estonian Soviet Socialist Republic, 19 

Esttelecom (Estonia) , 64-65 

ethnic groups (see also under individual 
groups): in Estonia, xix, 11, 25-26, 30- 
31, 79; in Latvia, 110-11, 118; in 
Lithuania, 191-92 

EU. See European Union 

European Bank for Reconstruction and 
Development (EBRD), 139, 222-23; 
relations with Estonia, 50-51 

European Investment Bank (EIB): loans 
to Latvia, 139; loans to Lithuania, 222 

European Union (EU): Baltic states 
admission sought, xxvii-xxviii; Esto- 
nian relations, 51, 73; free-trade agree- 
ment, xx, 220; humanitarian aid to 
Latvia, 139; Lithuanian associate 
membership, 233; Lithuanian rela- 
tions, 211-12 

Evangelical Lutheran Church (Latvia), 
102-3, 122 

Evangelical Lutheranism: in Estonia, 34; 
in Latvia, 121; in Lithuania, 197, 200 

Evangelical Reformed Church (Calvin- 
ist), in Lithuania, 197, 200 

Export-Import Bank of Japan, 139 

exports: by Estonia, 48; by Latvia, 140; by 
Lithuania, 215 

families: in Estonia, 31, 33; in Latvia, 

113-15; in Lithuania, 189-90 
farming, ^agriculture 



290 



Index 



Fatherland and Freedom Union 
(Latvia), 152 

Fatherland Party (Isamaa) (Estonia), 
xxiii, 66, 67, 68 

Fatherland Union (Lithuania) , xxii 

ferries: in Estonia, 63-64; Estonian-Swed- 
ish ferry disaster (1994), 64 

fertility rate: in Estonia, 31 

Finland: joint ventures in Estonia, 48, 50; 
life expectancy, 120; newspaper circu- 
lation, 153; standard of living, 132; 
Winter War against Red Army, 98 

Finnish population: in Estonia, 30-31 

fishing industry: in Estonia, 60 

food prices: in Estonia, 44 

foreign debt: of Lithuania, 220 

foreign investment: in Estonia, xxii, 48- 
51; in Latvia, xxii-xxiii, 139-40; in 
Lithuania, xxii, 222-23 

foreign policy. See foreign relations 

foreign relations (Estonia): with Russia, 
72; under Soviet Union, 72; with 
Ukraine, 77; with Western nations, 72- 
74 

foreign relations (Latvia): with Belarus, 
159; embassies and consulates in West- 
ern countries, 155; embassies in Riga, 
154, 156; establishing, 153-56; with 
Germany, 159; with Russia, 156-57, 
165; with Scandinavian countries, 159; 
with Ukraine, 159; Washington 
embassy, 154; with Western nations, 
154-55 

foreign relations (Lithuania): with 
Belarus, 236; with Poland, xxvii, 179, 
236; with Russia, 179, 234-36, 237-38; 
Russian troop withdrawal, 235; with 
Scandinavia, 236; with Ukraine, 236; 
with Western nations, 233-36 

foreign trade: Estonian, 39, 46, 48; 
Latvian, 138-39; Lithuanian, 219-20, 
236 

forests: acid rain damage, 188; in Esto- 
nia, 60; in Latvia, 104-5; in Lithuania, 
187 

free-trade agreements: in Baltics, xx, 73- 
74, 159; Lithuania with European 
Union, 220 

future outlook: for Estonia, 78-80; for 
Latvia, 164-65; for Lithuania, 241 

Gailis, Maris, 152 



Galinds, 93 

gas, natural: Estonian dependence on 
Russian, 61; markets for Estonia, 61 

gasoline shortages: in Estonia, 41 

gas pipelines: in Estonia, 61 

Gauja River (Latvia), 107 

GDP. See gross domestic product 

Genscher, Hans-Dietrich, 158 

geography. See topography 

German ization: Latvian resistance to, 95 

German population: in Estonia, 31; in 
Latvia, 110; in Lithuania,191 

Germany: control of Estonia, 12, 14-16; 
control of Latvia, 94; occupation of 
Estonia, 19; relations with Latvia, 159 

glasnost in Estonia, 20, 38, 70; in Latvia, 
102, 153; in Lithuania, 184; in Soviet 
Union, 20, 153 

GNP. See gross national product 

Goble.Paul, 159 

Godmanis, Ivars, 154 

Gorbachev, Mikhail S.: economic 
reforms under perestroika, 184; and 
glasnost, 70; and Lithuanian indepen- 
dence, 234; preservation of Soviet 
Union and, 19, 20-21, 23-24 

Gorbunovs, Anatolijs, 152 

government. See political situation 

Great Northern War of 1700-09 (Esto- 
nia), 14 

Green Party (Latvia), 151 

Griskevicius, Petras, 184 

gross domestic product (GDP): of Esto- 
nia, xxi, 39, 44; of Latvia, xxi, 133; of 
Lithuania, 211, 213, 219, 220 

gross national product (GNP): of Latvia, 
132; of Lithuania, 196 

Gypsies: in Latvia, 100, 110; in Lithuania, 
191 



Hanni, Liia, 55 
Hanseatic League, 14 
Harmony for Latvia, 151, 152 
Harmony for the People (Latvia), 152 
health care costs: in Lithuania, 196 
health care facilities: in Estonia, 32; in 

Latvia, 118; in Lithuania, 195 
health care professionals: in Estonia, 32; 

in Latvia, 118; in Lithuania, 195 
health problems: in Estonia, 29, 31-32; 

in Latvia, 121; in Lithuania, 195-96 



291 



Estonia, Latvia, and Lithuania: Country Studies 



Helsinki '86 (Latvian dissident group), 

98, 102, 103 
Helsinki Watch Committee, 184 
higher education. See education 
Hiiumaa (Estonia), 28 
Hitler, Adolf, 180 

HIV. See human immunodeficiency virus 

Home Guard (Lithuania), 239 

Home Guard (Zemessardze) (Latvia), 

161, 162, 164 
housing, privatization of: in Estonia, 55; 

in Latvia, 142, 144; in Lithuania, 196 
human immunodeficiency virus (HIV): 

in Lithuania, 195 
humanitarian aid: for Estonia, 50-51; for 

Latvia, 139; for Lithuania, 196 
human rights: in Estonia, 74; in Latvia, 

157, 158, 164; in Lithuania, 240 
hunting: in Latvia, 105 
Hurd, Douglas, xix 
Hurt, Jakob, 36-37 

hydroelectric power plants: in Latvia, 
106-7, 133, 153 

IAEA. See International Atomic Energy 
Agency 

Iceland: and independence of Estonia, 
24; recognition of Lithuanian sover- 
eignty, 234 

Ignalina (Lithuania): nuclear power 
plant, 188, 213, 215; Russian popula- 
tion in, 191 

IME. See Isemajandav Eesti 

IME See International Monetary Fund 

imports: by Estonia, 48; by Latvia, 1 38; by 
Lithuania, 220 

independence of Estonia: declaration of, 
11; Iceland recognition of, 24; inter- 
war independence (1918-40), 16-18; 
pursuit of (1985-91), 20-24; reclama- 
tion of (1991-92), 24-28; Russia rec- 
ognition of, 24; Soviet Union 
recognition of, 24; United States rec- 
ognition of, 24; Western relations and, 
19 

independence of Latvia: declaration of, 
149, 154; interwar independence 
(1918-40), 96-98; pursuit of (1987- 
91), 102-4; transition period, 148-50 

independence of Lithuania: declaration 
of, 179, 185, 224; history of, 177; inter- 



war independence (1918-40), 179-80; 
pursuit of (1987-91), 184-86, 230, 
234-35, 237; Western recognition of, 
185 

industrial pollution. See environmental 
pollution 

industry: in Estonia, 16-17, 56; in Latvia, 

133, 139; in Lithuania, 212-13 
infant mortality rate: in Estonia, 31; in 

Latvia, 120; in Lithuania, 195 
inflation rate: Estonian, 39, 44; Latvian, 

140; Lithuanian, 210 
Internal Security Agency (Lithuania), 

238 

International Atomic Energy Agency 
(IAEA), 72 

International Criminal Police Organiza- 
tion (Interpol), 162, 164 

International Monetary Fund (IMF): 
relations with Estonia, 41, 50; relations 
with Latvia, 140; relations with Lithua- 
nia, 206, 210, 211, 223 

International Movement of Workers 
(Estonia), 21 

Interpol. See International Criminal 
Police Organization 

iron ore: in Lithuania, 189 

Isamaa. See Fatherland Party 

Isemajandav Eesti (IME) economic plan 
(Estonia), 40 

Ivan IV (the Terrible), 14 

Ivans, Dainis, 103 

Jakobson, Carl Robert, 36 

Jannsen, Johann Voldemar, 36 

Jarvi, Neeme, 38 

Jatvings, 93 

Jensen, Elleman, 158 

Jerumanis, Aivars, 152 

Jewish population: in Estonia, 19, 31, 36; 

in Latvia, 100, 110-11, 118, 122, 124; 

in Lithuania, 182, 191, 192, 197, 200; 

Nazi persecution, 110-11, 124, 182 
Jogaila (Lithuanian grand duke), 178 
John Paul II (pope): visit to Baltic states, 

36 

Joint Representation of Lithuanian Inde- 
pendent Trade Unions, 216 
joint ventures: in Estonia, 48-50, 65 
Judaism. See Jewish population 
judicial system: in Estonia, 70, 79; in 



292 



Index 



Latvia, 151; in Lithuania, 225 
Jundzis, Talavs, 160 
Jurkans, Janis, 154, 156 
Jurmala (Latvia), 106 

Kaitseliit. ^Defense League 
Kalanta, Romas, 184 
Kalevipoeg (Kreutzwald) , 36 
Kaliningrad Oblast, xx, xxvii, 186 
Kallas, Siim, xx, xxviii, 41 , 42, 68 
Kalnins, Haralds (bishop), 128 
Kaplinski, Jaan, 38 
Karaite community' (Lithuania), 200 
Kaunas (Lithuania): population of, 191; 

as port city, 217; Russian population, 

191 

Kaunas School of Music (Lithuania) , 204 

Kert, Johannes, xxv 

Keskerakond. See Center Party- 
KGB. See Committee for State Security 

Khrushchev, Nikita S., 20, 37 

kihelkonnad. .SVe parishes 

Kingissepa. See Kuressaare 

Klaipeda (Lithuania), 179-80, 182; pop- 
ulation of, 191; as port city, 217; Rus- 
sian population, 191 

Koidula, Lvdia, 37, 38 

Komitet gosudarstvennoy bezopasnosti. 
See Committee for State Security 

Komjaunimo tieso (Lithuanian newspa- 
per), 233 

Koonderakond. See Coalition Party 

Krastins, Andrejs, 152 

Kreutzwald, Friedrich Reinhold, 36 

kroon (Estonian currency), 26, 39, 41, 
42,48 

Kross.Jaan, 38 

Krylov, Sergey, xx 

Kubiliunas, Petras, 181 

Kuchma, Leonid, 236 

Kuddo, Arvo, 45 

Kuressaare (Estonia), 30 

Kursiu Marios (Courland Lagoon) 
(Lithuania): pollution of, 188 

Kurzeme Province (Latvia), 94, 151 

Kwasniewski, Aleksander, xxvii 

Laar, Mart, xxiii, 39, 54, 66-68 
labor force. See employment; unemploy- 
ment 



Lacplesis (Bear Slayer) (Pumpurs), 129 
land, arable: in Estonia, 28; in Latvia, 

134; in Lithuania, 213 
land reform (see also privatization): in 

Estonia, 16; in Lithuania, 208, 210 
Landsbergis, Vytautas, 185, 204, 229-32 
language: in Estonia, 36; in Latvia, 129; 

in Lithuania, 184, 200-201, 202 
Latgale Province (Latvia), 151; and 
Latvianization programs, 112, 124; 
Roman Catholics in, 126 
latovichi (Russified Latvians), 101 
lats (Latvian currency), 96, 140 
Latvian Citizens' Committee (Latvijas Pil- 

sonu Komiteja), 149 
Latvian Democratic Labor Party, 151 
Latvian Farmers Union, 151, 152 
Latvianization program, 101, 112 
Latvian language, 129 
Latvian Military Academy, 162 
Latvian National Independence Move- 
ment (Latvijas Nacionala neatkaribas 
kustiba— LNNK) , xxiii, 101, 102, 151, 
152 

Latvian population: in Estonia, 31; in 

Lithuania, 191 
Latvian Savings Bank, 146 
Latvian Social Democratic Workers' 

Party, 151 
Latvian Soviet Socialist Republic, 100 
Latvian Writers Union, 103, 153 
Latvia's Way (Latvijas Cels), xxii, 151, 

152,156 
Latvijas Cels. Latvia's Way 
Latvijas Nacionala neatkaribas kustiba. 

See Latvian National Independence 

Movement 
Latvijas Pilsonu Komiteja. ^Latvian Cit- 
izens' Committee 
Latvijas Tautas Fronte. 5>g Popular Front 

of Latvia 
law enforcement. See crime 
Law on Aliens (1993) (Estonia), 61, 70, 

79 

Law on Foreign Investments (1992) 
(Lithuania), 222 

Law on Private Farming (1989) (Esto- 
nia), 58 

Law on Privatization (1993) (Estonia), 
55 

Law on Property (1990) (Estonia), 52 
Law on the Initial Privatization of State 



293 



Estonia, Latvia, and Lithuania: Country Studies 



Property of the Republic of Lithuania 
(1991), 207-8 
LDLP. See Lithuanian Democratic Labor 
Party 

LDP. See Lithuanian Democratic Party 

League of Independence War Veterans 
(Estonia), 17-18 

League of Nations: Estonian member- 
ship, 16; Latvian membership, 96; 
Soviet Union's expulsion from, 98 

legal chancellor (Estonia), 70 

Lenin, Vladimir I., 179 

Lielupe River (Latvia), 107 

Liepaja (Latvia), 136, 137 

Lietuvos aidas (Lithuanian newspaper), 
232-33 

Lietuvos rytas (Lithuanian newspaper), 
233 

life expectancy: in Estonia, 31; in Fin- 
land, 120; in Latvia, 118-20; in Lithua- 
nia, 189; in Soviet Union, 118-19 

litas (Lithuanian currency), 206, 210, 
230 

literacy rate: in Estonia, 34; in Latvia, 

118; in Lithuania, 205 
Literatura un Maksla (Latvian literary 

journal), 153 
literature: of Estonia, 36-38; of Latvia, 

129; of Lithuania, 202 
Lithuanian Activist Front, 181 
Lithuanian Democratic Labor Party 

(LDLP), xxii-xxiii, xxv-xxvi, 228, 230, 

231, 232 

Lithuanian Democratic Party (LDP) , 228 
Lithuanian Evangelical Church, 200 
Lithuanian Green Party, 228 
Lithuanian language, 184, 200-201, 202 
Lithuanian population: in Latvia, 110 
Lithuanian Reconstruction Movement 

{see also Sajudis) , 1 84 
Lithuanian Social Democratic Party 

(LSDP), 228 
Lithuanian Soviet Socialist Republic, 181 
Livland, 14, 15 
Livonia, 12, 14 
Livonians, 94 

LNNK. See Latvian National Indepen- 
dence Movement 

Looming (Estonian magazine), 38 

Lozoraitis, Stasys, 231—32 

LSDP. See Lithuanian Social Democratic 
Party 



LTF. See Popular Front of Latvia 

Lubys, Bronislovas, 232 

Lutheran Church: in Estonia, 34; in 

Latvia, 122, 125; in Lithuania, 197, 

200-201 



maakonnad. See counties 

Maaliit. See Rural Union 

Maapaev (Estonia), 15-16 

marriage statistics: for Estonia, 31; for 

Latvia, 114-15; for Lithuania, 190 
mass media: in Estonia, 70-72; in Latvia, 

153; in Lithuania, 232 
Mazvydas, Martynas, 201 
Meirovics, Gunars, 152 
Meri, Lennart, xxiv, xxv, 66-67, 68, 69- 

70, 72, 79 

Methodist Church: in Estonia, 36; in 
Latvia, 122 

migration: of emigrants from Lithuania, 
190-91; of Estonians, 30; of 
non-Latvians from Latvia, 113; of Rus- 
sians from Estonia, 30; from Soviet 
Union, 30 

military cooperation: among Baltic 

states, xxviii, 159 
Mindaugus (Lithuanian duke), 177-78 
mining: of oil shale in Estonia, 29, 60-61 
Ministry of Defense (Latvia), 160, 162 
Ministry of Defense (Lithuania), 238 
Ministry of Environment (Estonia), 29 
Ministry of Foreign Affairs (Latvia), 154, 

156 

Ministry of Interior (Latvia), 161, 162 
Ministry of Interior (Lithuania), 238, 
239-40 

Ministry of Welfare (Latvia), 147 
Moderates (Moodukad) (Estonia), 66 
Molotov, Vyacheslav, 97 
Molotov-Ribbentrop Pact. See Nazi-Soviet 

Nonagression Pact 
monetary policy: in Estonia, 39, 42, 44; 

in Latvia, 140; in Lithuania, 210-11 
Moodukad. See Moderates 
mortality. See population statistics 
Movement. See Sajudis 
movie industry: in Lithuania, 204 
music: in Estonia, 38; in Lithuania, 204 
Muslims: in Lithuania, 200 
My Fatherland Is My Love (Estonian 

national anthem), 38 



294 



Index 



NACC. See North Atlantic Cooperation 

Council 
Narva (Estonia), 12, 30 
Narva River (Estonia), 28 
national anthem: of Estonia, 38 
National Front (Estonia), 18 
national guard (Latvia), 161 
Nationalities Roundtable (Estonia), 67 
national security: of Estonia, 75-77; of 

Latvia, 159-62; of Lithuania, 236-38 
National Union of Economists (Latvia), 

152 

NATO. See North Atlantic Treaty Organi- 
zation 

natural resources: in Latvia, 110; in 

Lithuania, 188-89, 216 
navy. See armed forces 
Nazis: Jewish persecution, 110-11, 124, 

182; Lithuanian resistance movement 

and, 181-82; occupation of Estonia, 

19; occupation of Latvia, 100 
Nazi-Soviet Nonaggression Pact (Molo- 

tov-Ribbentrop Pact), 18, 21, 97-98, 

180-81, 185 
Nemunas River (Lithuania), 186-87 
Neringa (Lithuanian resort town), 216 
Neris River (Lithuania), 187 
newspapers: in Estonia, 36, 70-71; in 

Latvia, 153; in Lithuania, 232-33 
nomenklatura, 144 

Nordic Council: relations with Estonia, 

73 

North Atlantic Cooperation Council 
(NACC), xx, 73, 233, 237 

North Atlantic Treaty Organization 
(NATO): Baltic states membership, 
xx, xxvii; Baltic states peacekeeping 
exercises, xxviii; Estonian member- 
ship sought, 73; Latvian membership 
sought, 157; Lithuanian relations, 233, 
237-38; Partnership for Peace pro- 
gram, xx, 158, 237; troop reductions, 
157 

Norway: economic ties to Lithuania, 236; 
joint ventures in Estonia, 50; military 
assistance to Baltic Battalion, xxviii 

nuclear reactors in Estonia: and Soviet 
army waste, 30; and Soviet troop with- 
drawal, 75 

nuclear reactors in Lithuania, 185, 188, 
213 



oil: resources in Lithuania, 188-89, 215 
oil prices: Russian, 61 
oil-refining plant (Lithuania), 213 
oil-shale mining (Estonia), 29, 60-61 
Old Believers: in Estonia, 34; in Latvia, 

122; in Lithuania, 200 
OMON. See Soviet Ministry of Internal 

Affairs, Special Forces Detachment 
Oovel, Andrus, xxv 

Organization for Security and Coopera- 
tion in Europe (OSCE) (see also Con- 
ference on Security and Cooperation 
in Europe): Lithuanian membership, 
xx, 233, 237 

organized crime: in Estonia, 78; in 
Latvia, 120, 144, 145, 162; in Lithua- 
nia, 208, 222, 237, 240 

Orthodox Christianity: in Estonia, xxv, 
34, 36; in Latvia, 94, 122; in Lithuania, 
197 

Orthodox Church of Latvia, 122, 128 
OSCE. See Organization for Security and 

Cooperation in Europe 
Otryad militsii osobogo naznacheniya. 

See Soviet Ministry of Internal Affairs, 

Special Forces Detachment 
Our Home is Estonia!, xxiv 
Ozolas, Romualdas, 229 



Pact of Defense and Mutual Assistance 

(1939), 18,98, 181 
Pallas art school (Estonia) , 37 
Panevezys (Lithuania): population of, 

191 

Parek, Lagle, 67, 78 
parishes (kihelkonnad) in Estonia, 12 
Parliamentary Defense Service (Lithua- 
nia), 238 
Parnu (Estonia), 12 
Part, Arvo, 38 

Partnership for Peace program, xx, 158, 
237 

Pats, Konstantin, 17-18 

Pavlovskis, Valdis, 162 

Peipsi, Lake (Estonia), 28 

Pelse, Arvids, 101-2, 107 

pensions: in Estonia, 33; in Latvia, 121, 

142; in Lithuania, 194-95 
Pentecostals: in Latvia, 122, 129; in 

Lithuania, 200 
perestroika: in Estonia, 20, 40; in Latvia, 



295 



Estonia, Latvia, and Lithuania: Country Studies 



102; in Lithuania, 184 
Perez de Cuellar, Javier, 235 
Pemo Postimees (Estonian newspaper) , 36 
Peter I (the Great), 14, 94 
Peters, Janis, 155 
Peterson, Kristjan Jaak, 37 
petroleum. SeeoW 

PHARE. See Poland/Hungary Aid for 
Restructuring of Economies program 
poets, ^literature 

Poland: Lithuanian relations with, xxvii, 

178-79; Livonian relations with, 14; 

war with Lithuania (1920), 179 
Poland/Hungary Aid for Restructuring 

of Economies (PHARE) program, 51, 

139 

Polish-Lithuanian Commonwealth, 178 
Polish population: in Estonia, 31; in 
Latvia, 110, 111; in Lithuania, 191,192 
political demonstrations: in Estonia, 21, 
23; in Latvia ("calendar" demonstra- 
tions), 98, 102-3, 164; in Lithuania, 
184, 185 

political parties: in Estonia, 15, 17-18, 
20-22, 66-67, 79; in Latvia, 96, 151- 
52; in Lithuania, 228 

Political Prisoners and Exiles (Lithua- 
nia), 231 

pollution, ^environmental pollution 
Popular Front of Latvia (Latvijas Tautas 

Fronte— LTF), 103, 111, 148, 149, 151, 

152, 154, 160 
population statistics of Estonia, 30-31; 

Jewish population, 19; Russophone 

population, 11 
population statistics of Latvia, 104, 110- 

15, 118-20; Latvians as a minority 

group, 112 
population statistics of Lithuania, 189- 

92, 194 

precipitation: in Estonia, 28; in Latvia, 

108; in Lithuania, 187 
press. See mass media; newspapers 
prisons: in Estonia, 78; in Lithuania, 240 
privatization: of banks in Lithuania, 212; 
in Estonia, 39, 45, 51-55; in Latvia, 
142, 144-47, 164; in Lithuania, 207-8; 
of publishing in Lithuania, 232; of 
telecommunications in Latvia, 138 
Progressive People's Party (Estonia), 15 
property reform. See privatization 
property restitution: in Estonia, 51-52, 



53; in Latvia, 142 
Prunskiene, Kazimiera, 229-30 
Prussians, 93, 177 
Pugo, Boris, 102 
Pumpurs, Andrejs, 129 

Quayle, J. Danforth: visit to Baltic states, 
74 



radio broadcasting: in Estonia, 71-72; in 
Latvia, 138; in Lithuania, 218-19 

railroads: in Estonia, 63; in Latvia, 135; 
in Lithuania, 217 

Rainis, Janis, 129 

Rajeckas, Raimundas, 232 

Ravnopraviye (Equal Rights Movement) 
(Latvia), 149, 151, 152 

Rebas, Hain, 67, 77 

Rebirth and Renewal (Atdzimsana un 
Atjaunosana) (Latvia), 103, 125 

Red Army: Finland's Winter War against, 
98; invasion of Estonia, 18-19; inva- 
sion of Latvia, 100; Latvian leadership 
in, 95; Lithuanian resistance to, 179, 
181-82 

Red Riflemen (Latvia) , 95 

religion {see also under individual sects): in 
Estonia, 34, 36; freedom of, 201; in 
Latvia, 121-22, 123-29; in Lithuania, 
182, 197, 200-201 

resistance movement: in Latvia, 100; in 
Lithuania, 181-83 

Respublika (Lithuanian newspaper), 233 

revolution of 1905: in Estonia, 15; in 
Latvia, 95; in Lithuania, 179 

Ribbentrop, Joachim von, 97 

Riga (Latvia): embassies in, 154, 156; as 
port city, 95, 136 

Riigikogu (State Assembly) (Estonia), 
17,28, 38,55,65-68, 69, 70 

Riigivaraamet. See State Property Board 

roads: in Estonia, 62-63; in Latvia, 135- 
36; in Lithuania, 217 

Rojalistlik Partei. See Royalist Party 

Roman Catholic Church: in Latvia, 125- 
26; in Lithuania, 179, 182, 183, 200; in 
Soviet Union, 126, 128; welfare ser- 
vices, 196 

Roman Catholics: in Estonia, 36; in 
Latvia, 112, 121-22, 124, 126; in 



296 



Index 



Lithuania, 197; persecution of, 182 
Royalist Party (Rojalistlik Partei) (Esto- 
nia) , 66 
ruble (Latvian), 140 
Rummo, Paul-Eerik, 37-38 
Runnel, Hando, 38 
Rural Center Party (Estonia), 66 
Rural Union (Maaliit) (Estonia), 66 
Russia: bases in Latvia, 157; conquest of 
Latvia, 94; Estonian border and, xxiv, 
28-29; Estonian independence and, 
24; foreign relations with Latvia, 156, 
165; foreign trade with Estonia, 46; 
Lithuania as province of Russian 
Empire, 178-79; troop withdrawals 
from Estonia, xx, 74-75; troop with- 
drawals from Latvia, xx, 156-58; troop 
withdrawals from Lithuania, 156, 235 
Russian Communist Party, 96 
Russian Democratic Movement (Esto- 
nia), 68 

Russian Orthodox Church: claim to 
property in Estonia, xxv; in Lithuania, 

200 

Russian population: in Estonia, xix-xx, 
11, 25-26, 30-31, 79; in Latvia, xix, 110, 
111; in Lithuania, xix, 191-92; rela- 
tions with other groups, xxi 

Russification: of Estonia, 15; of Latvia, 
101-2; Latvian resistance to, 95, 101, 
124; of Lithuania, 184 

Ruutel, Arnold, 23, 66 



Saaremaa (Estonia), 28 
Saeima (Latvian parliament), 96, 148, 
150, 152 

Sajudis (Movement) (Lithuania) , xxii, 

184-85, 228-32, 237 
Sakala (Estonian newspaper), 36 
Satversme (Constitution) (Latvia), 149 
Savings Bank (Lithuania), 212 
Savisaar, Edgar, xxiv, 23, 25, 40-41, 52 
Schliiter, Poul, 73 

Schutz-Staffel (SS): in Lithuania, 182 
Seimas (Lithuanian legislature), 225- 
27, 231 

Sesupe River (Lithuania), 187 
Seventh-Day Adventists: in Estonia, 36; in 

Latvia, 122, 129; in Lithuania, 200 
shipping industry: in Estonia, 63-64: in 

Latvia, 137; in Lithuania, 217 



Siauliai (Lithuania): population of, 191; 

Russian population, 191 
Siegerist, Joachim, xxiii 
Simenas, Albertas, 230 
"singing revolution" (Estonia), 11, 20, 38 
Sirpja Vasar (Estonian magazine), 38 
Skele, Andris, xxvii 
Skrunda radar base (Latvia), 157-58 
Sladkevicius, Vincentas (cardinal), 200 
Slezevicius, Adolfas, xxii, xxv-xxvi, 206, 

210, 211, 232 
Smetona, An tanas, 180, 201 
smoking: in Latvia, 121; in Lithuania, 

195 

Snieckus, An tanas, 182 

Social Democratic Party (Estonia), 15, 66 

Social Democrats (Lithuania), 181, 231 

Social Revolutionaries (Estonia), 15 

social welfare: in Estonia, 33; in Latvia, 
121; in Lithuania, 194-95 

Society of Worldwide Interbank Tele- 
communication (SWIFT), 146 

Songaila, Ringaudas, 184, 185 

Soviet Ministry of Internal Affairs, Spe- 
cial Forces Detachment (Otryad mil- 
itsii osobogo naznacheniya — 
OMON), 24, 103 

Soviet Union: coup of 1991, 11, 24, 102, 
103, 186; economic blockade of 
Lithuania, 185, 219, 229; Estonian 
admission to, 18; Estonian foreign 
trade under, 46; Estonian occupation 
by, 18-19; expulsion from League of 
Nations, 98; glasnost, 20, 153; and 
Latvian independence, 234-35; 
Latvian deportations, 100; Latvian 
occupation by, 93; Latvian relations, 
98-102; life expectancy, 118-19; 
Lithuanian domination, 180-84; 
Lithuanian resistance, 181; perestroika, 
20; Roman Catholic Church in, 126 

sports: in Lithuania, 204-5 

SS. See Schutz-Staffel 

Stalin, Joseph V.,xxiv, 18, 20,96, 98, 101, 
180, 182 

standard of living: of Finland, 132; of 

Latvia, 132; of Lithuania, 196, 212 
Stankevicius, Mindaugas, xxvi-xxvii 
State Assembly. See Riigikogu 
State Commercial Bank (Lithuania) , 212 
State Defense Council (Lithuania), 238 
State Property Board (Riigivaraamet) 



297 



Estonia, Latvia, and Lithuania: Country Studies 



(Estonia), 52, 55 
State Statistics Board (Estonia), 56, 60 
suicide rate: in Estonia, 31; in Latvia, 120 
sulfur dioxide production, in Estonia, 29 
Supreme Committee for the Liberation 

of Lithuania, 181-82 
Supreme Council (Estonia), 24, 25, 28 
Supreme Council (Latvia), 103, 148-49; 
Committee on Defense and Internal 
Affairs, 160; discussion of border dis- 
putes, 158 
Supreme Council (Lithuania), 185 
Supreme Soviet (Estonia), 20, 22, 38, 40, 
52 

Supreme Soviet (Latvia), 103, 148 
Supreme Soviet (Lithuania) , 224, 229 
Supreme Soviet (Soviet Union) Council 

of Nationalities, 102 
Suur Munamagi (Egg Mountain) (Esto- 
nia), 28 

Sweden: joint ventures in Estonia, 48, 50; 
military assistance to Baltic Battalion, 
xxviii; relations with Estonia, 73; suzer- 
ainty of Estonia, 14 

SWIFT. See Society of Worldwide Inter- 
bank Telecommunication 



Latvia, 138; in Lithuania, 218 
television broadcasting: in Estonia, 71; in 

Latvia, 138; in Lithuania, 218 
Teutonic Knights: Christianization of 

Estonians, 34; conquest of Prussia, 

177; Estonian resistance to, 12, 14; 

Lithuanian relations with, 177-78 
theater: in Estonia, 37; in Latvia, 129 
thorium: in Estonia, 29 
Todeja Oigus (Tammsaare) , 37 
Tonisson, Jaan, 15 

topography: of Estonia, 28-29; of Latvia, 

1 04-7; of Lithuania, 1 86-87 
Tormis, Veljo, 38 

tourism: in Estonia, 65; in Latvia during 
Soviet era, 106; in Lithuania, 216 

townships (vald) (Estonia), 70 

toxic waste: in Estonia, 29-30; in Latvia, 
107; in Lithuania, 188 

trade. See foreign trade; free-trade agree- 
ments 

trade unions: in Lithuania, 216-17 
transportation (see also specific forms of 
transportation): in Estonia, 62-63; in 
Latvia, 135-37; in Lithuania, 217-18 
Treaty of Versailles (1919), 179-80 



Tallinn (Estonia): early history of, 12; 
foreign investment in, 49-50; popula- 
tion of, 30 
Tallinn Art University (Estonia), 34 
Tallinn Pedagogical University (Esto- 
nia) , 34 

Tallinn Technical University (Estonia), 
34 

Tammsaare, Anton Hansen, 37 

Tannenberg, Battle of (Lithuania) , 178 

Tarand, Andres, 68 

Tartu (Estonia), 12, 30 

Tartu Peace Treaty (1920), 16; and Esto- 
nian border, xxiv-xxv, 28, 75 

Tartu University (Estonia), 14, 34 

Tatars: in Lithuania, 191 

taxes in Estonia, 40-41, 44; property tax, 
58; value-added tax, 44 

taxes in Latvia: value-added tax, 142 

taxes in Lithuania, 210-11 

Teemant, Jaan, 15 

telecommunications: in Estonia, 64-65; 

in Latvia, 138; in Lithuania, 217-19 
telephone service: in Estonia, 64-65; in 



Ukraine: relations with Estonia, 77; rela- 
tions with Latvia, 159; relations with 
Lithuania, 236 

Ukrainian population: in Estonia, 30; in 
Latvia, 111; in Lithuania, 191 

Ulmanis, Guntis, xxvii, 152 

Ulmanis, Karlis, 97 

UNCTAD. See United Nations Confer- 
ence on Trade and Development 
Under, Marie, 37 

underground movement. See resistance 
movement 

UNDP. See United Nations Development 
Programme 

unemployment: in Estonia, 45-46, 80; in 
Latvia, xxii, 139; in Lithuania, 223 

UNESCO. See United Nations Educa- 
tional, Scientific, and Cultural Organi- 
zation 

Uniates (Eastern-Rite Catholics): in 

Lithuania, 200 
United Nations: Estonian membership, 

72; Latvian membership, 155, 158; 

Lithuanian membership, 235 



298 



Index 



United Nations Conference on the Envi- 
ronment and Development, 29 

United Nations Conference on Trade 
and Development (UNCTAD), 72 

United Nations Development Pro- 
gramme (UNDP), 72 

United Nations Educational, Scientific, 
and Cultural Organization (UNES- 
CO), 72, 158 

United Nations High Commissioner for 
Human Rights, 240 

United States: investment in Lithuania, 
222; relations with Estonia, 74; rela- 
tions with Lithuania, 180, 234 

Universal Bank of Latvia, 146 

uranium: in Estonia, 29 



Vaivods, Julijans (cardinal), 126 
Vagnorius, Gediminas, 210, 230-31 
Vahi, Tiit, xxiv, 26, 41 
Vaino, Karl, 20, 38 

Valancius, Motiejus (bishop), 200, 201 
void. See townships 
Valjas, Vaino, 20, 40 
Valk, Heinz, 11, 24 

value-added tax (VAT): in Estonia, 44; in 
Latvia, 142; in Lithuania, 210 

Vanemuine theater group (Estonia), 37 

Vasiliauskas, Aleksandras, xxii 

VAT. See value-added tax 

Venta River (Latvia), 107 

Venta River (Lithuania), 187 

Ventspils (Latvia), 136-37 

Vertrauensrat (Council of Trustees) 
(Lithuania), 181 

Via Baltica, xxvii, 63, 159, 217 

Vidzeme Province (Latvia), 94, 151 

Vikerhaar (Estonian magazine), 38 

Vilnius (Lithuania), 179, 181; ethnic 
groups in, 191, 192, 194 

Vilnius Brigade (Lithuania), 240 

Vilnius massacre (1991), 185-86, 234 

Vilnius School of Choreography (Lithua- 
nia), 204 

Vilnius University (Lithuania), 205 

Visegrad Group, 159 



Visnapuu, Henrik, 37 

Vortsjarv (lake) (Estonia), 28 

Voss, Augusts, 102, 131 

voting rights. See citizenship issues 

vouchers for privatization: in Estonia, 55; 

in Latvia, 146-47; in Lithuania, 208 
Vyshinsky, An drey, 98 
Vytautas (Lithuanian grand duke), 178 
Vytautas Magnus University (Lithuania), 

205 



wages: in Estonia, 44-45; in Latvia, 147- 

48; in Lithuania, 217 
Walesa, Lech, 236 

War of Independence (1918-20) (Esto- 
nia), 16 
welfare. Asocial welfare 
Western Economic Union (WEU) , 237 
WEU. See Western Economic Union 
WHO. See World Health Organization 
wildlife: in Latvia, 105 
woodcarving: in Lithuania, 202, 204 
World Bank: loans to Latvia, 139 
World Health Organization (WHO), 158 
World Trade Organization (WTO), 233 
World War I: and Estonia, 15; and Latvia, 

95; and Lithuania, 179 
World War II: and Estonia, 18-19; and 
Latvia, 97-98, 122; and Lithuania, 
180-82 
writers. See literature 
WTO. See World Trade Organization 

Yeltsin, Boris N.: solidarity with Lithua- 
nia, 234; summit meeting with Baltic 
leaders, 23; troop withdrawal negotia- 
tions with Estonia, 67; troop with- 
drawal negotiations with Latvia, 157; 
United States support for, 74 



Zemessardze. See Home Guard 
Zemgale Province (Latvia), 151 
Ziedonis, Imants, 129 



299 



Contributors 



Juris Dreifelds is Associate Professor, Department of Politics, 
Brock University, St. Catharines, Ontario, Canada. 

Walter R. Iwaskiw is a Senior Research Specialist in East Euro- 
pean Affairs, Federal Research Division, Library of Con- 
gress, Washington, DC. 

Velio A. Pettai is Visiting Lecturer, University of Tartu, and a 
Ph.D. Candidate, Department of Political Science, Colum- 
bia University, New York, New York. 

William A. Slaven is a Foreign Service Officer and Political/ 
Economic Analyst for the Baltic States and Moldova, 
Department of State, Washington, DC. 

V. Stanley Vardys (deceased) was Professor Emeritus, Depart- 
ment of Political Science, University of Oklahoma, Nor- 
man, Oklahoma. 



301 



Published Country Studies 



(Area Handbook Series) 



550-65 


Afghanistan 


550-36 


Dominican Republic 


550-98 


Albania 




and Haiti 


550-44 


Algeria 


550-52 


Ecuador 


550-59 


Angola 


550-43 


Egypt 


550-73 


Argentina 


550-150 


El Salvador 


550-111 


Armenia, Azerbaijan, 


550-113 


Estonia, Latvia, and 




and Georgia 




Lithuania 


550-169 


Australia 


550-28 


Ethiopia 


550-176 


Austria 


550-167 


Finland 


550-175 


Bangladesh 


550-173 


Germany, East 


550-112 


Belarus and Moldova 


550-155 


Germany, Fed. Rep. of 


550-170 


Belgium 


550-153 


Ghana 


550-66 


Bolivia 


550-87 


Greece 


550-20 


Brazil 


550-78 


Guatemala 


550-168 


Bulgaria 


550-174 


Guinea 


550-61 


Burma 


550-82 


Guyana and Belize 


550-50 


Cambodia 


550-151 


Honduras 


550-166 


Cameroon 


550-165 


Hungary 


550-159 


Chad 


550-21 


India 


550-77 


Chile 


550-154 


Indian Ocean 


550-60 


China 


550-39 


Indonesia 


550-26 


Colombia 


550-68 


Iran 


550-33 


Commonwealth Carib- 


550-31 


Iraq 




bean, Islands of the 


550-25 


Israel 


550-91 


Congo 


550-182 


Italy 


550-90 


Costa Rica 


550-30 


Japan 


550-69 


Cote d'lvoire (Ivory 


550-34 


Jordan 




Coast) 


550-56 


Kenya 


550-152 


Cuba 


550-81 


Korea, Norm 


550-22 


Cyprus 


550^1 


Korea, South 


550-158 


Czechoslovakia 


550-58 


Laos 



303 



ccn 0/1 
J JU— Z4 


Lebanon 


j jU— /U 


Senegal 


550-38 


Liberia 


550-180 


Sierra Leone 


550-85 


Libya 


550-184 


Singapore 


550-172 


Malawi 


550-86 


Somalia 


550-45 


Malaysia 


550-93 


South Africa 


JJU — 1U 1 


1V1 dill 1 Idllld 


j JU— yj 


ooviei uiiioii 


550-79 


Mexico 


550-179 


Spain 


550-76 


Mongolia 


550-96 


Sri Lanka 


550-49 


Morocco 


550-27 


Sudan 


550-64 


Mozambique 


550^17 


Syria 




l^CJJdl dllLl JJllULd.ll 


ccn 

J JU— oz 


Tanzania 


550-88 


Nicaragua 


550-53 


Thailand 


550-157 


Nigeria 


550-89 


Tunisia 


550-94 


Oceania 


550-80 


Turkey 


550^8 


Pakistan 


550-74 


Uganda 


ccn a& 


Don ottti o 

r dlldilld 


550-97 


Uruguay 


550-156 


Paraguay 


550-71 


Venezuela 


550-185 


Persian Gulf States 


550-32 


Vietnam 


550-42 


Peru 


550-183 


Yemens, The 


550-72 


Philippines 


550-99 


Yugoslavia 


550-162 


Poland 


550-67 


Zaire 


550-181 


Portugal 


550-75 


Zambia 


550-160 


Romania 


550-171 


Zimbabwe 


550-37 


Rwanda and Burundi 






550-51 


Saudi Arabia 







304 



mwrm 

UBflAfly OF CONGRESS 

^$2^00 

PIN: 074790-000 



